Budget 2016 – Landlord reactions

Budget 2016 – Landlord reactions

14:00 PM, 16th March 2016, About 7 years ago 137

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The Chancellor George Osborne has just delivered his Government’s Budget.

Quick reference details for Landlords Below:

Stamp Duty surcharge of 3% on residential property to apply to all investors regardless of size.

Stamp Duty on commercial property transactions is to be reformed. Our understanding is that bandings will be applied similar to residential property, albeit with a zero rate up to £150k and then 2% of any amount over £150K and up to up to £250K and then 5% of any amount over £250k. As an example, on a property that costs £300,000 the SDLT would be £4,500 – i.e. £0 on the first £150k, 2% on the next £100k (£2,000) and finally 5% on the next £50k (£2,500). If our understanding is correct then this will also impact on on related transactions of 6 or more connected property transactions (e.g. at incorporation of a property portfolio). More on this HERE

Capital Gains Tax Reduced – from 28% to 20% for higher rate tax payers and from 18% to 10% for low rate tax payers from April 2016. However there will be an 8% surcharge on residential property leaving Landlords selling at the same old rate!

Maximum interest relief against profit capped at 30% of turnover, but this is only for the largest companies and will not affect Landlords. This was a concern for Landlords pre-Budget.

Tax free income tax allowance threshold – increased to £11,500 from April 2017

High rate tax threshold – increased to £45,000 from April 2017

Corporation tax – decreased to 17% by 2020

Insurance premium Tax IPT – increased 0.5% and funds raised to be spent on UK flood defences (£700million)

Fuel Duty – Frozen again this year

Class 2 National Insurance for self employed to be scrapped

The Office for Budget Responsibility has downgraded growth forecasts due to external economic headwinds from the uncertainty in the Global economy.

Growth for 2015 was 2.2% but the forecast has reduced from 2.4% to 2.0% in 2016 with 2017 growth of 2.2% and then 2.1% for the following years.


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Martin Stephenson

9:06 AM, 17th March 2016, About 7 years ago

I can totally understand why the tax man is targeting us wealthy property owners. Why only last month one of our rental properties in Burnley actually cashflowed nearly £50!!!.......but then we had to install another boiler. Still slightly new to btl, but am i correct in thinking the 3% stamp duty only affects when we sell the property? In which case if we buy to hold on for a few years and hopefully the value goes up, then and only then do we get slammed for the extra?

Old Mrs Landlord

10:27 AM, 17th March 2016, About 7 years ago

Reply to the comment left by "Martin Stephenson" at "17/03/2016 - 09:06":

Sorry Martin, you seem to be confusing Stamp Duty Land Tax, which is paid on purchase of property, with Capital Gains Tax which is paid on any increase in the price of the property between purchase and sale and is paid when you eventually come to sell.

NW Landlord

10:37 AM, 17th March 2016, About 7 years ago


John Mcgowan

17:01 PM, 17th March 2016, About 7 years ago

Unfortunately we landlords have been given a very bad press in the past and so are soft targets for Osborne. He is a desperate bully who is able to target us due to biased reporting by the press who always took what bad tenets said about us as true when of course most of it was lies. Apart from targeting us he has now made a serious mistake of hitting the disabled which should backfire. We are being deliberately and obviously descriminated against and am hopeful that a fair minded intelligent judge will see this to.


18:24 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "Ethical Man" at "16/03/2016 - 23:56":

That sounds very logical but many landlords only break even from rental income and invest with the hope of some capital appreciation to make a few percent more than obtained on capital in a bank account over the long term.


18:33 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "John Mcgowan" at "17/03/2016 - 17:01":

Some one commented on the radio earlier about the comparison between the CGT tax reduction for the weathly and the cut in disability allowance.
For once I am glad CGT remains unchanged for us landlords as surely payments affecting around 640,000 disabled should take priority.
This is serious mistake by George .

Dr Rosalind Beck

18:53 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "David Lovegrove" at "17/03/2016 - 18:33":

A very good point, David. I don't want to benefit at the expense of disabled people and am very pleased to see they are out in force protesting - something which must be very difficult for many of them to do.

Vanessa Barlow

19:00 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "Steve Wood" at "16/03/2016 - 21:21":

Oh, just because I don't like them very much to be honest. And it annoyed me to think I would be paying the 3% and they wouldn't under the proposed rules. That's all. Annoyed me that small businesses like myself were being discriminated against bigger businesses. Don't like the extra cost I will have to pay now, but if it's happening it should apply equally.


19:49 PM, 17th March 2016, About 7 years ago

This is quite a good summary for anyone just finding out about the woes of the landlord


Sorry if it has been posted somewhere already!

Alex Russell

23:00 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "Shirleyannn Haig" at "16/03/2016 - 19:49":

I don't understand what incorporate even means. I am willing to learn if anyone can put in layman's. I only have 5 to get rid of now and still have capital loss carried forward so not to worried about CGT.

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