No fooling on April 1 UK stamp duty surcharge

Effective April 1, a 3% stamp duty surcharge on the purchase of second homes and buy-to-let properties will go into effect. The announcement was made last week during Chancellor George Osborne’s budget speech.

Disappointing to many who anticipated that landlords with more than 15 properties would be exempt from the stamp duty increase, this was not the case and all purchasers of buy-to-let properties will pay the additional tax.

The response from the industry was immediate. David Cox, managing director, Association of Residential Letting Agents (ARLA), said: “Professional landlords play a vital role in providing rental stock to the market, and providing the army of renters we have in this country with housing. We’re already in a position where demand out-strips supply and as supply falls, rent costs rise, meaning the goal of home-ownership falls even further out of reach for most of the country’s renters.” ARLA is a sister organization to the National Association of Estate Agents, the UK member of WorldProperties.

Also disappointing to professional investors was news that the April 6 reduction in capital gains tax for both higher and basic rate taxpayers will not apply to gains on residential property. Any gains from this investment will be taxed at current rates.

ICREA