0:06 AM, 25th October 2024, About a month ago 2
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Buy-to-let landlords may face a 17% rise in stamp duty bills as Chancellor Rachel Reeves prepares for the upcoming budget.
Stamp Duty is a tax on property purchases, with an extra 3% surcharge for landlords and second-home buyers.
The Telegraph reveals the Chancellor could unwind stamp duty tax breaks that were introduced by the Conservatives in 2022.
Under Liz Truss, the stamp duty threshold was raised from £125,000 to £250,000, and from £300,000 to £425,000 for first-time buyers.
However, these cuts are set to end in April 2025, with no extension anticipated in the upcoming Budget, which could bring back the 2% rate on properties valued between £125,000 and £250,000.
Analysis by Hamptons reveals buy-to-let landlords buying a £309,572 home will pay £12,266 in stamp duty in October 2024.
However, this amount is expected to rise to £14,766 by April 2025, representing a significant 17% increase. In August 2016, landlords buying a £231,176 property paid £9,059 in stamp duty.
Aneisha Beveridge, head of research at Hamptons, says most home movers next year will be subject to higher stamp duty bills.
She said: “Stamp duty was first introduced as a way to tax more affluent households who bought property. But over time, successive governments have used it as a tax-raising lever, pulling more movers into the tax bracket.
“Next year’s increase will mean that around nine in ten movers will be subject to a stamp duty bill, up from just over half today. If the £125k nil-rate band had risen in line with national property prices since it was first introduced in 2006, it should be around £215,675 today to ensure that the majority of households can move tax-free.”
Ms Beveridge also warns first-time buyers could also be hit by higher stamp duty bills.
She said: “Buyers in London and Southern England have seen bills rise much faster than everyone else. This partly reflects the scale of house price growth seen in these areas, pushing more homes above the nil-rate threshold.
“However, it also reflects how tax rates for more expensive homes have been disproportionately hiked by successive governments over the last twenty years, dragging far more people into paying a bill.
“While the maximum £2,500 increase is unlikely to deter most movers, first-time buyers, who could face an increase of over £11k will be hit hard.
“This change will significantly reduce their purchasing power, particularly impacting those buying their first home in London and the South where property prices tend to be higher. It’s likely that these buyers will instead purchase more affordable homes, or it could mean having to save up for longer, potentially weighing on homeownership rates.”
A Treasury spokesman told The Telegraph: “We do not comment on speculation around tax changes outside of fiscal events.”
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Smiffy
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Sign Up21:25 PM, 25th October 2024, About a month ago
may, could, anticipated.
All just speculation! Just wait and see what happens, talking now won't make a blind bit of difference.
Retired GasMan
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Sign Up9:17 AM, 27th October 2024, About a month ago
Reply to the comment left by Smiffy at 25/10/2024 - 21:25
absolutely correct!