Skip to main content

Autumn Statement: Buy-to-let homes face higher stamp duty

Buy-to-let landlords and people buying second homes will soon have to pay more in stamp duty, the chancellor has announced.
From April 2016, those in England and Wales will have to pay a 3% surcharge on each stamp duty band.
George Osborne said the new surcharge would raise £1bn extra for the Treasury by 2021.
Landlords reacted angrily to the change, saying it would "choke off" investment in rented properties.
Other changes announced by the chancellor included an extended Help to Buy scheme in London, and more money for the Starter Homes programme.

'Choke off investment'

The stamp duty surcharge will lift each band by 3%. That means that for properties worth between £125,000 and £250,000, where the stamp duty is 2%, buy-to-let landlords will pay 5%.
For the average buy-to-let purchase of £184,000, that means they will pay an extra £5,520 from April 2016.
Commercial property investors, with more than 15 properties, are expected to be exempt from the new charges.
Stamp Duty Rates (on purchases)
Property valueStandard rateBuy-to-let/second home rate (April 2016)
Up to £125,000     0%                3%
£125 - £250,000     2%                5%
£250 - £925,000     5%                8%
£925 - £1.5m    10%               13%
over £1.5m    12%               15%
Source: HMRC
Buy-to-let landlords will also be hit by a change to Capital Gains Tax (CGT) rules.
From April 2019, they will have to pay any CGT due within 30 days of selling a property, rather than waiting till the end of the tax year, as at present.
Landlords are already due to get a lower rate of tax relief on mortgage payments.
In his summer Budget, the chancellor said that landlords would only receive the basic rate of tax relief - 20% - on mortgage payments, a change being phased in from 2017.
Responding to the latest changes, Richard Lambert, chief executive of the National Landlords Association said: "The chancellor's political intention is crystal clear; he wants to choke off future investment in private properties to rent.
"If it's the chancellor's intention to completely eradicate buy-to-let in the UK then it's a mystery to us why he doesn't just come out and say so".
Up to £60m of the money raised from the stamp duty surcharge will go to help home-buyers in England in places where holiday homes have forced up local prices.

new homes
Image captionAn extra £2.3bn will be lent by the government for building starter homes

Help to Buy

The Help to Buy (equity loan) scheme in England will also be extended to 2021, one year longer than planned.
An extension to the scheme in London will see buyers who can find a 5% deposit given a loan worth up to 40% of the property.
The loan will be interest free for five years.
Elsewhere the existing maximum loan is for 20% of the property's value.
In total, the government will put an extra £6.9bn into housing.
This includes an extra £2.3bn in loans for the government's starter homes programme, and £4bn lent to housing associations and local authorities to build more homes for shared ownership.
Another £200m will be used to build homes for rent, which will allow tenants to save for a deposit.
There will also be a pilot scheme to trial the government's Right to Buy programme for housing association tenants.
Five housing associations will take part, to help design the final scheme.


Further Reading 
Hatched By Russell Quirk CEO emoov Online Estate Agency how the online estate agency Industry is playing out

More buy-to-let landlords searching for mortgages on cheaper properties + housing market shows no sign of slowing down winter months

Bad Debt in Emerging Markets: Still Early Days IMF 

CML and Which? reveal new mortgage tariff to help consumers compare fees and charges

Housing and Planning Bill Committee Thursday 19 November 2015 Meeting CML mortgage news

Britain building again as new homes rise by a quarter

UK House Price Index September 2015 

Bank of England dampens prospects of early UK rate rise >Raising interest rates to deal with housing market problems would hit the rest of the economy too hard 

New right-to-buy boom: 1,000 people a week signing up to housing association sell-off ahead of launch of new scheme 

Osborne says tougher buy-to-let regulation on its way 

Government launches National Infrastructure Commission to get Britain building

Draw up plans to build more homes in two years... or we'll do it for you: PM's threat to reluctant town halls 

countrywide PLC sees a direct threat from online real estate agents like for like ? 

Almost twice as many brits believe that property makes better use of cash then isa , pensions stock , shares ,premium bonds


Mortgage advances pick up in the third quarter says CML

Property shortages keep driving up house prices, say experts

Historic Housing and Planning Bill will transform generation rent into generation buy 

TfL releases land for 10,000 homes across the Capital 

Boris tells planners & developers to put culture first for city development

House Prices will continue to rise & construction of more not the answer 

Taylor Wimpey CEO Peter Redfern will lead Labour Housing Redfern Review

London real estate most overpriced property globally, warns UBS

House Prices ,Mortgage applications , interest rates house building update

Sadiq Khan Housing Crisis Update Fair rental prices 

How low can you go ? speech by Andy Haldane BoE Chief Economist 

London’s housing crisis > Blue and Red debates @ London Mayor Question Time

reaching more people with our property fraud advice Land Registry

Bank of England concerns over Property buy-to-let boom

Britain Inflation and housing: joined at the hip 

The European Union, monetary and financial stability, and the Bank of England - speech by Mark Carney

Zac Goldsmith: housing crisis number one priority in London – what needs to be done


TfL could help fix London’s housing Crisis as well as our trains 

A question from Matthew > PMQs Jeremy Corbyn MP vs The Prime Minister David Cameron 

Labour conference: Sadiq Khan >"I'm going to make the election a referendum on London's housing crisis"

Newly Elected Labour Candidate, for Mayor of London, Sadiq Khan, outlines his Housing Policies

What Jeremy Corbyn's leadership victory may mean for housing policy in the UK

Marie's Question >Jeremy Corbyn The New Labour Leader takes his seat in the Houses of Parliament

Building Markets for the Good of People > BoE Open Forum

Government ministers and housing association leaders have negotiated a deal to extend the right-to-buy policy

Historic Housing and Planning Bill will transform generation rent into generation buy

How low can you go ? speech by Andy Haldane BoE Chief Economist

Three Truths about Finance - Governor of BoE - Mark Carney

Mortgage Lenders and Administrators statistics Bank of England Sept 2015

Osborne says tougher buy-to-let regulation on its way

House Prices will continue to rise & construction of more not the answer

Right To Buy Homes Urgent Parliament questions with Brandon Lewis UK housing Minster 

Borrowing figures in the mortgage market remain strong as customers take advantage of record low interest rates

property eCommerce is booming ! 

Residential sales Move up despite lack of property Stock

Government ministers and housing association leaders have negotiated a deal to extend the right-to-buy policy