New, extra 3% Stamp Duty on BTL?
Discussion
Bradgate said:
Hopefully this is just the start of the government using the tax system to strongly disincentivise not just BTL, but residential property speculation more widely.
It is a national disgrace that speculators can own dozens of homes, while others have none.
Property prices and rents are both far too high, and if these measures are the start of government action to reverse both, Britain will be better for it.
If it results in the reduction of house prices (which I hope not as I have recently purchased my first house) it will make buying houses more affordable for everyone. Speculators, FTB, BTL etc, which will increase demand again. Sounds like a bumpy housin market to me. It is a national disgrace that speculators can own dozens of homes, while others have none.
Property prices and rents are both far too high, and if these measures are the start of government action to reverse both, Britain will be better for it.
Also how does this effect houses purchased by limited companies? The changes to claiming of expenses and mortgage interest is already making it more attractive for people
pauldavies85 said:
^ dream on. The wealth divide has never been bigger and will continue to grow.
I think the changes in taxation on mortgage interest has a much greater effect.
I disagree. Though i do think those effects have been underestimated. However I think the implication of this for second home owners, and people changing primary residence who happen to have a btl, second home or even a shared ownership of a property to help a dependent is massive.I think the changes in taxation on mortgage interest has a much greater effect.
Bradgate said:
Hopefully this is just the start of the government using the tax system to strongly disincentivise not just BTL, but residential property speculation more widely.
It is a national disgrace that speculators can own dozens of homes, while others have none.
Property prices and rents are both far too high, and if these measures are the start of government action to reverse both, Britain will be better for it.
Well said that man.It is a national disgrace that speculators can own dozens of homes, while others have none.
Property prices and rents are both far too high, and if these measures are the start of government action to reverse both, Britain will be better for it.
The only surprise is that it's the Tories doing this, not Labour. I think I need to go and sit down for a while.
WB,
We focus on this as a grab against pensioners using 'Freedoms' to buy property, but the guidance is clear too, in that if you own the one property (say, the small BTL was the first) and if you then buy another (the larger, more expensive PPR) - it then becomes your second property so you're liable for the extra tax on it, and not what is used as your BTL. So, to avoid the higher SDLT on the PPR you would need to offload your BTL first.
We focus on this as a grab against pensioners using 'Freedoms' to buy property, but the guidance is clear too, in that if you own the one property (say, the small BTL was the first) and if you then buy another (the larger, more expensive PPR) - it then becomes your second property so you're liable for the extra tax on it, and not what is used as your BTL. So, to avoid the higher SDLT on the PPR you would need to offload your BTL first.
Ginge R said:
WB,
We focus on this as a grab against pensioners using 'Freedoms' to buy property, but the guidance is clear too, in that if you own the one property (say, the small BTL was the first) and if you then buy another (the larger, more expensive PPR) - it then becomes your second property so you're liable for the extra tax on it, and not what is used as your BTL. So, to avoid the higher SDLT on the PPR you would need to offload your BTL first.
I get thatWe focus on this as a grab against pensioners using 'Freedoms' to buy property, but the guidance is clear too, in that if you own the one property (say, the small BTL was the first) and if you then buy another (the larger, more expensive PPR) - it then becomes your second property so you're liable for the extra tax on it, and not what is used as your BTL. So, to avoid the higher SDLT on the PPR you would need to offload your BTL first.
The question was say you have 6 houses and one PPR all owned Pre the change. Then you decide to move so sell the PPR and buy another PPR in the same transaction ie a chain why should you then pay more 3% when no increase in properties
Surely this extra 3% is only referring to anything that is not your current stated PPR.
If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
ITP said:
Surely this extra 3% is only referring to anything that is not your current stated PPR.
If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
It could be either. If you wanted to push people towards selling their rental properties then applying it to all purchases, that leave you owning more than one residential, would be the way to do it.If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
ITP said:
Surely this extra 3% is only referring to anything that is not your current stated PPR.
If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
Watch this space. If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
I'm surprised that any political party had the nerve to tackle the buy to let market, but I applaud the torys for doing so.
I recently heard some statistics behind the current market. The % of sales that were buy to lets was quite frankly stunning, and indicative of a dysfunctional market that was being masked by those in the right position to purchase buy to lets.
I've long had an opinion that despite the British obsession with how much your home was worth, the only people gaining were the banks with increased interest income, and the investors who can sell. The typical home owner can never realise their increase in value as they'll need it elsewhere - or to fund their nursing home...
The people whose home ownership that this demand was stealing was the young people, who mostly with no help from mum and dad would really struggle to get onto the housing market.
It will be interesting to see what this does to the market. I suspect it's going to discourage the churn, but ultimately the real do it uppers, will just lose value to the point that the development becomes viable again. The people it will hurt will be the completed apartment / homes where buyers will be limited to those with larger portfolios or owner occupiers.
Interesting times ahead.
I recently heard some statistics behind the current market. The % of sales that were buy to lets was quite frankly stunning, and indicative of a dysfunctional market that was being masked by those in the right position to purchase buy to lets.
I've long had an opinion that despite the British obsession with how much your home was worth, the only people gaining were the banks with increased interest income, and the investors who can sell. The typical home owner can never realise their increase in value as they'll need it elsewhere - or to fund their nursing home...
The people whose home ownership that this demand was stealing was the young people, who mostly with no help from mum and dad would really struggle to get onto the housing market.
It will be interesting to see what this does to the market. I suspect it's going to discourage the churn, but ultimately the real do it uppers, will just lose value to the point that the development becomes viable again. The people it will hurt will be the completed apartment / homes where buyers will be limited to those with larger portfolios or owner occupiers.
Interesting times ahead.
Welshbeef said:
ITP said:
Surely this extra 3% is only referring to anything that is not your current stated PPR.
If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
Watch this space. If, for example, someone lives in their family home and has 4 flats they rent out decides to buy another flat it will be subject to the extra 3%. If they decide to sell one flat and buy a different one that will incurr the 3% too on the new purchase, even though the number of properties remain the same.
However, to suggest that if the family wanted to move house, family home to new family home, with no change to the BTL portfolio, an extra 3% would be charged on that is nonsense.
But in the scenario above are we saying that the only way for the family above to now avoid an extra 3% duty on just moving house is to sell ALL of their BTL's first? Potentially triggering a large CGT bill as well if the BTL's have been owned for a long time. It would both be unaffordable and completely mess up their pension planning.
If said family had to move, for work for example, the only option really under those dracoinian circumstances would be to keep the family home, rent it out, and rent another in the new destination to avoid the tax.......
When will we gain clarity on The Principle primary residence purely if they move home no additional buy to let?
What about static caravans?
Wait about long boats?
How does it work if you have bought with others (not wife) so a a small % owner then do you still get stung the 3% on the PPR?
What if you inherit a property and you physically receive it 1 minute before you move your own PPR? Do you instantly take another 3% hit?
What about static caravans?
Wait about long boats?
How does it work if you have bought with others (not wife) so a a small % owner then do you still get stung the 3% on the PPR?
What if you inherit a property and you physically receive it 1 minute before you move your own PPR? Do you instantly take another 3% hit?
surveyor said:
I'm surprised that any political party had the nerve to tackle the buy to let market, but I applaud the torys for doing so.
I recently heard some statistics behind the current market. The % of sales that were buy to lets was quite frankly stunning, and indicative of a dysfunctional market that was being masked by those in the right position to purchase buy to lets.
I've long had an opinion that despite the British obsession with how much your home was worth, the only people gaining were the banks with increased interest income, and the investors who can sell. The typical home owner can never realise their increase in value as they'll need it elsewhere - or to fund their nursing home...
The people whose home ownership that this demand was stealing was the young people, who mostly with no help from mum and dad would really struggle to get onto the housing market.
It will be interesting to see what this does to the market. I suspect it's going to discourage the churn, but ultimately the real do it uppers, will just lose value to the point that the development becomes viable again. The people it will hurt will be the completed apartment / homes where buyers will be limited to those with larger portfolios or owner occupiers.
Interesting times ahead.
It will get a lot more interesting I reckon. I recently heard some statistics behind the current market. The % of sales that were buy to lets was quite frankly stunning, and indicative of a dysfunctional market that was being masked by those in the right position to purchase buy to lets.
I've long had an opinion that despite the British obsession with how much your home was worth, the only people gaining were the banks with increased interest income, and the investors who can sell. The typical home owner can never realise their increase in value as they'll need it elsewhere - or to fund their nursing home...
The people whose home ownership that this demand was stealing was the young people, who mostly with no help from mum and dad would really struggle to get onto the housing market.
It will be interesting to see what this does to the market. I suspect it's going to discourage the churn, but ultimately the real do it uppers, will just lose value to the point that the development becomes viable again. The people it will hurt will be the completed apartment / homes where buyers will be limited to those with larger portfolios or owner occupiers.
Interesting times ahead.
Housing market has been broken for quite a while from the perspective of a young family. Nearly every agents ad I see for houses under 150k or so either states the likely percentage return on profit if rented, or 'ideal Buy to let'. Phone the agents and one of their first questions is is it being bought as an investment property?
I'm guessing gubbermint is going to have to exclude principle residences very clearly or there's going to be some very peed off ex-Tories.
You're right - the actual value of property is irrelevant to everyone already in the market until after you die - unless selling up and retiring somewhere warmer is the planned end game....
PurpleMoonlight said:
I would hope that there will be the ability to distinguish a property that is being purchased as a PPR and one as an investment or second home.
There is already a ton of legislation covering these types of distinction in place - mainly under the Capital Gains Tax rules. I hope that any new rules for Stamp Duty purposes will follow the CGT rules - otherwise it will be very difficult to keep track of what rules apply to what tax.Surely this will work in the same way as CGT works, i.e. no CGT on your PPR, but CGT liable on the sale of any other property.
You have to demonstrate that you've lived in your property for 6 months for it to count as your PPR.
Under the new stamp duty rules it would make sense that if you sold what was deemed your PPR, you could purchase a replacement property without paying the extra 3% stamp duty.
You have to demonstrate that you've lived in your property for 6 months for it to count as your PPR.
Under the new stamp duty rules it would make sense that if you sold what was deemed your PPR, you could purchase a replacement property without paying the extra 3% stamp duty.
CaptainSensib1e said:
You have to demonstrate that you've lived in your property for 6 months for it to count as your PPR.
Absolutely and 100% incorrect.Nowhere in the CGT rules does it stipulate how long anyone has to live in a property to establish it as a main residence.
There are some cases where a main residence can be established even if you have never lived there.
Conversely, there have been cases where a main residence has been denied even though the taxpayer DID live in the property.
The establishment of whether a property is a main residence or not is dependent on multiple factors. Length of time one has lived in it MAY be considered - but it is not a stand alone test.
How all this translates into determining whether the 3% additional Stamp Duty applies should be interesting.
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