Death of Buy-to Let
Majority of landlords were shocked when new tax changes were unveiled in summer 2015, followed by the new stamp duty changes which came into effect on 1st April 2016. Many investors remain unaware of the change or underestimate their severity.
At the heart of the change is landlords’ future inability to deduct the cost of their mortgage interest from their rental income. In other words, tax will be applied to the gross rent received – rather than what is left of the rent after the mortgage interest has been paid. This means that the majority of UK landlords will be in a minus situation at the end of each month and with a very sizable Tax bill at the end of each year.
Another penalty for property buyers and sellers
If you are selling your home and the completion date is after 1st April 2016, the chances are that the value of your property will drop and there will be fewer buyers. This is due to a new ruling that comes into force from 1st April 2016 that stipulates anyone buying additional residential property, including second homes and buy-to-lets, has to pay an extra 3% in stamp duty – please see table below.
The BMH Solution
We will buy your investment properties before you face the prospect of an annual loss. These losses could balloon further as interest costs rises. Where you have a portfolio, it will make sense to sell one property and reduce the borrowings on others.
This is due to a new ruling that comes into force from 1st April 2016 that stipulates anyone buying additional residential property, including second homes and buy-to-lets, to pay an extra 3% in stamp duty.
This additional charge will apply above the current “stamp duty land tax” rates (see table below).
Call us on 08000 122 10008000 122 100 so we can help You BEAT the New TAX Laws.Property Experts are suggesting that it may well be time to sell now rather than wait for prices to drop in April 2016
- Standard rate
- Buy-to-let/Second home rate (April 2016)
- Up to £125,000