The significant rise in buy-to-let property over the past few years (especially by those looking to invest a pension, or acquire something that will one day yield supplement income) has often been blamed for preventing first time buyers from getting onto the property ladder.
Following the Autumn Statement there will be a rise in the stamp duty rates charged on the purchases of but-to-let or second homes, with effect from 01 April 2016. The higher rates will apply to property costing more than £40,000, and will be 3% above the current SDLT rates.
Changes in the Stamp Duty rules took place in 2014; you now pay different rates on different proportions of a purchase price, rather than the previous regime of paying one rate if the property was priced in a certain bracket.
The effect of the new rules will mean that the 3% rise is added onto the existing stamp duty rate.
Current stamp duty rate
New stamp duty rate for buy-to-let or additional properties
Up to £125,000
£125,000.01 - £250,000
£250,000.01 - £925,000
£925,000.01 - £1,500.00
Certain types of property are excluded from the higher rates, namely caravans, mobile homes or house boats. No stamp duty will be charged on the first £40,000, even if the property costs more.
As an example, someone currently buying a second home or investment property for £275,000 would currently pay £3,750 in stamp duty. Following the changes in April 2016 their stamp duty bill would rise to £12,000.