Summer Economic Update – Landlords Reaction

by Property 118

13:46 PM, 8th July 2020
About a month ago

Summer Economic Update – Landlords Reaction

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Summer Economic Update – Landlords Reaction

The Chancellor, Rishi Sunak, has just given a Summer Economic Update to the house of commons as the second of three phases to guide the UK through the Covid-19 National Emergency.

The much anticipated, hyped and discussed Stamp Duty reductions increasing the threshold where no SDLT is paid to £500,000 will be introduced with immediate effect until the 31st March 2021. However, the Chancellor confirmed this will be available for ‘buying a main home’ and no such mention was made for second or investment properties leaving landlords and BTL out in the cold.

A £2 billion green homes grant scheme will be accessible for Landlords though and will contribute two thirds of the cost to energy efficiency improvements to all residential homes up to a maximum of £5,000.

The Chancellor said: ” As part of this package homeowners and landlords in England will be able to apply for vouchers from a £2 billion Green Homes Grant scheme this year to pay for green improvements such as loft, wall and floor insulation that could save some households hundreds of pounds a year on their energy bills while creating thousands of jobs for tradespeople.”

The rate of VAT applied on most tourism, accommodation, attractions and hospitality-related activities will also be cut from 20% to 5% until the 12th January. The detail on whether this will include Holiday Homes is not yet clear and further guidance on the scope of this relief will be published by HMRC in the coming days.

New .Gov update on Stamp duty click here:

Higher rates for additional properties

The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%


Comments

Neil Patterson

13:51 PM, 8th July 2020
About a month ago

The increase in Stamp Duty threshold has only tried to tackle the demand side of the housing market where the real weakness has in the last twenty years been supply.

This will also do nothing to increase supply of quality private rental property for tenants that can't get on the property ladder.

Neil Patterson

13:52 PM, 8th July 2020
About a month ago

I may take advantage of a half price meal though in August!

Dr Rosalind Beck

14:02 PM, 8th July 2020
About a month ago

Reply to the comment left by Neil Patterson at 08/07/2020 - 13:52
Yes, Neil. That's the only thing I might take advantage of - IF it applies to Wales as well. In the past, I could practically ignore what was going on in Cardiff Bay. Now it's like Drakeford is our glorious leader and dictates if and when we can even go to the toilet.

Jim Fox

14:05 PM, 8th July 2020
About a month ago

So, does it appear that investment/BTL purchases wont benefit from the Stamp Duty Holiday?

Martin

14:22 PM, 8th July 2020
About a month ago

Surely it will help as the 3% surcharge is on top of what is normally paid.
I know it's not the bonus of no stamp duty we hoped for, but you will pay less on a second purchase now.

Jim Fox

14:26 PM, 8th July 2020
About a month ago

Reply to the comment left by Martin at 08/07/2020 - 14:22
Even although the purchase wont be for a 'main home' Martin?

Coastal

14:26 PM, 8th July 2020
About a month ago

Wrongly thought at first that this could help with potential stamp duty costs when transferring ones properties into a Ltd Co!

Neil Patterson

14:41 PM, 8th July 2020
About a month ago

New .Gov update on Stamp duty:

Higher rates for additional properties
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.

The following rates apply:

Property or lease premium or transfer value SDLT rate
Up to £500,000 3%
The next £425,000 (the portion from £500,001 to £925,000) 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 13%
The remaining amount (the portion above £1.5 million) 15%

Seething Landlord

14:48 PM, 8th July 2020
About a month ago

The Chancellor in his speech said that nobody buying their main residence for up to £500,000 would pay any SDLT. I understood that he was effectively increasing the nil rate band to £500,000 and that others purchasing additional properties would just pay the 3% surcharge.

Rbinscotland

14:49 PM, 8th July 2020
About a month ago

Reply to the comment left by Neil Patterson at 08/07/2020 - 13:51
TYep.... All I heard from this was the 50% ( up to £10.00) discount. Not sure how relevant much of the rest will be. Still waiting for HMRC for SE Scheme and or HSBC bounceback loan. And i've applied for UC and they are dragging there hills since April. Ill open a 2nd tin of beans for me an d the kids and send the 23p invoice to the government.

To be honest Im at the end of my tether even trying to chase them up.

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