If any United Kingdom property investors hoped to escape the proposed 3 percent stamp duty tax on buy-to-let property, they were left disappointed by Finance Minister George Osborne’s latest announcement in his annual budget statement yesterday (Wedneday).
Even the proposed exemption to tax for larger landlords and institutional investors who own more than 15 properties appears not to be going ahead. Investors in high value commercial property will also be subject to higher taxes, as the stamp duty rates have now been graduated to mirror the stamp duty thresholds for residential property, with the top rate at 5 percent.
Investors listening to the budget statement as it was announced briefly got their hopes up when Osborne (pictured) announced that capital gains tax (CGT) rates would be reduced but alas, these changes do not apply to residential property.
“We had desperately hoped that Osborne would listen to reason and scrap his plans for this extra 3 percent stamp duty,” said Vidhur Mehra, Finance Director of London’s Benham & Reeves Residential Lettings agency.
“It is unfairly singling out landlords – many of whom are simply trying to shore up their retirement income.
“Amateur property investors are not the enemy and given that the U.K. government has said that further investment is needed in the private rental sector, this won’t help.”
Dot Property Group strongly suggests that anyone considering U.K. property investments seeks appropriate independent tax and legal advice before entering into any agreement.