NLA Autumn Statement Briefing

Article Posted -
25 Nov 2015

An NLA briefing on the Autumn Statement can be found here. 

 

Stamp Duty – 3% surcharge on new buy to let purchases.

Investors will be charged higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes, from 1 April 2016. 

The higher rates will be 3% above the current SDLT rates, (which can be found here) but if you buy property 40k or under it will be 0%.  One penny over that and you pay the full 3% on the whole amount.

The government are planning to ‘consult’ on the policy detail. Including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate.  It will not apply to purchases of caravans, mobile homes or houseboats.  They will also not apply to corporates or funds making significant investments in residential property.

 

 

Current rates

New rates with surchange

Up to £125,000

0%

3%

The next £125,000 (the portion from £125,001 to £250,000)

2%

5%

The next £675,000 (the portion from £250,001 to £925,000)

5%

8%

The next £575,000 (the portion from £925,001 to £1.5 million)

10%

13%

The remaining amount (the portion above £1.5 million)

12%

15%

 

If you buy a house for £275,000, the SDLT you owe is calculated as follows:

 

OLD

NEW

0% on the first £125,000

£0

£ 3750 @ 3%

2% on the next £125,000

£2,500

£ 6250 @ 5%

5% on the final £25,000

£1,250

£ 2000 @ 8%

Total SDLT 

£3,750

£ 12 000

 

Housing Benefit - cap

There will be a cap on the the amount of rent that Housing Benefit will cover in the social sector to the relevant Local Housing Allowance, which is the rate paid to private renters on Housing Benefit.

This will include the Shared Accommodation Rate for single claimants under 35 who do not have dependent children. This will apply to tenancies signed after 1 April 2016, with Housing Benefit entitlement changing from 1 April 2018 onwards

There is a limit on Housing Benefit and Pension Credit payments to 4 weeks for claimants who are outside Great Britain, from April 2016.  This reform will ensure the benefit system is not paying the rent of people who go abroad for more than 4 weeks at a time

Council Tax – new 2% Tax precept

The Chancellor announced new powers for local councils to increase social care funding through a new 2% Council Tax precept.

Online Tax Returns – online submissions by 2020

As previously announced by 2020, most businesses, self-employed people and landlords will be required to keep track of their tax affairs digitally and update HMRC at least quarterly via their digital tax account.

HMRC will ensure the availability of free apps and software that link securely to HMRC systems and provide support to those who need help using digital technology.  The government will consult on the details in 2016.

Capital Gains Tax to be repaid within 30 days

The Chancellor announced a requirement for the capital gains tax due to be paid within 30 days of completion of any disposal of residential property.  This requirement will be introduced from April 2019 to ensure that HMRC’s digital systems are ready to provide support, making paying this tax simpler and quicker for taxpayers.

Homelessness increased funding

The government are increasing the funding available to invest in ‘innovative’ ways of preventing and reducing homelessness, including:

  • protecting Department for Communities and Local Government (DCLG) funding for targeted homelessness intervention
  • devolving an increased level of funding to local authorities while ending the current management fee for temporary accommodation, giving them greater flexibility to invest in preventing homelessness

All government budget documents can be found here

 

Comments

Submitted by 84484 on 7 December 2015 - 1:09pm

If the aim of the Government is to preserve residential properties for local occupier / owners, the first thing they should have done is to stop granting Golden Visas / resident permits to foreigners who invest £300,000+ in residential properties or at least increase this long standing threshold for golden visas to £3 million.

The local BTL landlords rent out their properties whereas most of the foreign property investors keep the properties empty because they are only interested in the security of their money.

Submitted by 503123 on 4 December 2015 - 2:10pm

This is a real blow to those small landlords trying to provide just a few decent properties at decent prices, but doesn't hit those companies who have bigger portfolios.
Maybe the quality of tenants in Dubai might be better too!

Submitted by 44468 on 28 November 2015 - 5:03pm

I had enough of this George's attack on small landlords. I have started to put my portfolio on the market, and take the money out and buy BTL in Dubai and Malaysia. at least you get annual rent paid in advance in these countries and no silly regulations like Tories UK.

UK loss is Dubai and Malaysia's gain!

Submitted by 131489 on 26 November 2015 - 9:11am

Yet again Landlords are hammered. The chancellor had to find a saving of £4bn for tax credit cuts that failed in the House of Lords so he attacks landlords again. His short term thinking will ultimately deter investors from the private sector and this can only lead to increased rents and/or reduced housing provision for all types of tenants as investors shy away from buy-to-let.

Join the NLA

The NLA is the UK's leading association providing support for private residential landlords, serving over 40,000 members nationwide. New landlords join the NLA for advice, information and guidance and to keep up-to-date with fast changing laws and regulations.

Join today and receive instant access to a wide range of key landlord services, award-winning resources and exclusive supplier discounts.

Become a member