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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Steve Wood

23:22 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "Alex Russell" at "17/03/2016 - 23:00":

Incorporate means to transfer your properties into a limited company.
You need an accountant to help look at the related issues and also mortgages - finance considerations needed too. The reason being to get a tax deduction for your interest expense. I would be willing to have a general chat with you to explain more. Don't think there is a private message facility is there?

Alex Russell

23:28 PM, 17th March 2016, About 7 years ago

Reply to the comment left by "Steve Wood" at "17/03/2016 - 23:22":

Hi Steve, that would be really good of you. Maybe get me on Facebook, Alex Russell Bristol.

Julius Caesar

6:44 AM, 18th March 2016, About 7 years ago

There definitely seems to be a general consensus forming now that rents will be rising as a consequence of GO's sustained attack on landlords:


8:09 AM, 18th March 2016, About 7 years ago

After a long meeting with our accountant yesterday we have instructed Mark Smith and set up our Ltd company. It was important to us to get it done before the deadline which is today. He doesn't need much just a spreadsheet with all the portfolio info on, the payment, £10k in our case with a signed contract and agreement from the accountant to do the rest. We will save £40000 in stamp duty by doing it before 1st April so couldn't take the risk of waiting and seeing if the judiciously review is successful.

Monty Bodkin

8:51 AM, 18th March 2016, About 7 years ago

Reply to the comment left by "Shirleyannn Haig" at "18/03/2016 - 08:09":

"the payment, £10k in our case"

Which coincidentally would be covered in two years by a £25 pcm rent increase on all your 17 properties.

I've already increased mine by more than that, with near zero voids and my lowest rent arrears levels ever.

As more landlords wake up to this, I see a lot more rent increases to come.

Nicholas Dickinson

8:53 AM, 18th March 2016, About 7 years ago

Reply to the comment left by "Shirleyannn Haig" at "18/03/2016 - 08:09":

Good move Shirleyannn. Welcome to the "BICT club"! The more landlords that wake up to the fact this is the way to go, the better. Like everyone ese I wish the Judicial Review every success, but I believe the chances of Clause 24 going away are slim at best.

NW Landlord

9:13 AM, 18th March 2016, About 7 years ago

Hi shirlyanne

I am about to do it today how did you instruct over phone ? Did you have to pay the 10k up front ?


9:26 AM, 18th March 2016, About 7 years ago

Reply to the comment left by "NW Landlord" at "18/03/2016 - 09:13":

I emailed Mark Smith directly on Wednesday, his clerk sent me the paperwork out the same day then I emailed everything back, and sent the signed paperwork in the post. The contract says payment must be made upfront so we are paying that today, by bacs once our accountant confirms our company has been set up with HMRC.

Nicholas Dickinson

9:30 AM, 18th March 2016, About 7 years ago

Reply to the comment left by "Shirleyannn Haig" at "18/03/2016 - 09:26":

Can I suggest you use a name for the company that is similar to your own, which might help to keep you below the radar when you change your direct debits over for your mortgage payments


10:15 AM, 18th March 2016, About 7 years ago

Reply to the comment left by "Nicholas Dickinson" at "18/03/2016 - 09:30":

We are going with Haig Holdings do u think that will be ok

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