What do the new stamp duty changes mean for UK Property Investors?
Government Rubber Stamps Good News For Property Investors
During 2020, we’ve become accustomed to bad news from Government updates. Thankfully, as restrictions begin to lift in the UK, we’ve finally had some welcome news for property investors – and the economy.
Raising the roof on tax charges
On the 8th of July, Chancellor of the Exchequer, Rishi Sunak, announced that the threshold for SDLT (Stamp Duty Land Tax) is to be raised to £500,000 until the 31st of March 2021. The announcement, which was part of Mr Sunak’s Summer Statement, applies to residential homes in England and Northern Ireland and has been put in place to help the recovery of the economy post-COVID-19.
Mr Sunak said, ‘We need people to feel confident to buy, sell, move and improve and, that will drive growth and create jobs’.
An investment that’s as safe as houses
For property investors, this is without a doubt great news. Although there will be a 3% SDLT surcharge on the purchase of second homes and buy-to-let investments, the new announcement means that there will still be significant savings on property purchases below the £500,000 threshold.
The changes, which came into effect immediately, meaning that those looking to invest in property may be able to save up to £15,000 in SDLT (based on a property priced at £499,000 as the SDLT will cost £14,970 compared to £29,920 before the stamp duty holiday.
A great day for the UK property market
The UK property market is historically strong and resilient and, Property remains one of the most solid investments that we can make. While it’s estimated that the nine-month stamp duty holiday will cost the Government around £3.8 billion, however, the benefits to property investors and the economy will be immediate and significant.
The new SDLT threshold also applies to overseas investors who will be subject to the same 3% surcharge as UK based investors.
As we move into the second half of 2020, the Chancellor of the Exchequers announcement will be seen as a light at the end of the tunnel for first time buyers, landlords and property investors alike.
You may be interested in reading this article: A Guide to Property Investment Due Diligence