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Buy-to-Let Landlords Welcome Stamp Duty Cut

Posted on July 9th, 2020

The summer statement provided a much welcome boost for buy-to-let landlords who stand to benefit from the stamp duty holiday. 

The levy has been scrapped immediately for all homes under £500,000, to kick-start the stalled housing market and pick up the flagging economy. 

Rishi Sunak said the move would benefit nine in ten home buyers, saving £4,500 on the average purchase.

But with the threshold raised, purchasers, including buy-to-let landlords, acquiring a property for less than £500,000 will save up to £15,000 on their total tax bill.

However, the 3% surcharge for additional homes, including buy-to-let properties, still applies on top of the revised standard rates, so purchases of homes valued up to £500,000 will attract a 3% stamp duty bill.

Sara Macallum, senior partner at Boodle Hatfield, said: “The 3% surcharge will still sit on top of these new bands – so for buyers of second homes, they will pay 3% SDLT up to £500,000, as opposed to 3% up to £125k, 5% from £125k up to £250k, and 8% from £250k to £500k.”

“Overall, it works out as an SDLT saving of £15k for both normal and additional rate taxpayers. Taking the example of a first-time buyer of an apartment for £750k, they will pay SDLT of £12,500 instead of £27,500. If on the other hand this were someone buying a second home, they would pay SDLT of £35,000 instead of £50,000. 

“Companies will also benefit from these changes where they are not subject to the flat 15% rate.”

Article abridged from Landlord Today;


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