It’s no joke…
Indeed, the Government’s latest plan to place a 3% surcharge on SDLT (Stamp Duty Land Tax) from today on purchasing additional properties is no laughing matter… With today seeing that change actually happening, it seems like they’re having a good laugh at us all!
So, what does this mean for us as landlords or would-be landlords?
Well, the more commonly-known fact is that the surcharge applies to any property you purchase which is ‘in addition’ to your own residence, for any purpose. For example, Buy-to-Let, Holiday Let, development project, etc. What you may be unaware of, however, are some of these lesser-known facts about the change. Being aware of these may prevent you from otherwise being caught out by a nasty surprise!
• If you are with a partner who already owns a property, but you are a first time buyer, any property which you purchase together will still be subject to the surcharge.
• If you are a landlord but you are currently renting your main residence (a position which many people found themselves in post credit crunch when they moved out of an area, couldn’t afford to buy and then rented out their main residence), then when you purchase another main residence, you will be subject to the surcharge. Unless, however, you sell your previous main residence within 3 years of the move, in which case you’d be entitled to a refund of the surcharge.
• If you intend to buy properties into a Limited Company as a way of avoiding the surcharge, this will not happen. As a homeowner, your purchase of a property into a Limited Company will still be affected by the surcharge.
Now, understandably, this is all a bit of a blow…however, on the upside,
…where there is bad news, also follows opportunity. If you are still business-minded about your property endeavours and educate yourself accordingly, then you will realise that these additional ‘problems’ will push some, perhaps more amateur investors/landlords out of the market. By keeping a close eye on your target area and seeing how these changes affect it over the coming months, then there will still be some real ‘gems’ which pop up and make good, financial sense.
Other than this, I trust you are enjoying the fact that Spring is now firmly here. I hope you enjoy a relaxing and enjoyable weekend ahead. 🙂
Wishing you all the best with your continued property endeavours.