DO NEW STAMP DUTY TAXES MEAN BYE-BYE BUY TO LET
Surprise Autumn Statement announcement is set to wipe out landlord profits
Landlords are in shock after a second huge tax assault on buy to let by the Chancellor which will force investors to pay thousands more in Stamp Duty on new properties – on top of the loss of tax reliefs unveiled in July.
A new 3% additional Stamp Duty rate on any property bought as a buy to let or as a second home, will see the tax on a £175,000 purchase jump six fold from £1,000 to £6,250 (see table below). For someone buying in London, say a two bed flat for £400,000, the Stamp Duty rises from £10,000 to £22,000.
Not only will prospective landlords have to pay far more than conventional residential buyers, they also face much heavier taxes on their profits. The maximum tax relief will drop from 45% and 40% to just 20%, so that an investor with a £150,000 buy to let mortgage on a property worth £200,000 is likely to see his or her net annual profit collapse from £2,160 a year to just £960.