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Landlords rushing to buy new properties ahead of April tax hike

Buy-to-let investors are in a rush to purchase properties before an extra three per cent stamp duty charge takes effect.

From April, landlords or second home owners will be required to pay the surcharge on top of stamp duty, raising the costs of an upfront rental investment.

Chancellor George Osborne only announced the tax hike in November’s Autumn Statement, which gave prospective buyers just four months to beat the increase.

The extra stamp duty will raise the tax bill of buying a £200,000 buy-to-let home to £7,500 from £1,500 today.

Experts say that the extra tax would erase up to 14 months of income for investors.

Now agents say buyers are trying to buy before the middle of February with the aim of completing by April.

Jeremy Leaf, former RICS chairman and London estate agent, told “Because of the tight timeframe, there is more risk in buying a property in a chain because of the chance of fall-through of the sale, leaving even less time to complete a transaction.

“Landlords may opt for new-build instead where there is no such risk and they have certainty of sale.

“Inevitably, we have seen examples of vendors taking advantage of landlords’ desperation to complete before the April deadline, with some being greedy on the price.

“Landlords, or indeed those buying a second home, who are keen to do a deal before April should also ensure they have a good solicitor on board and have spoken to an independent mortgage broker about finance.”

Following Mr Osborne’s announcement, critics said a rush of buyers hoping to beat the tax could push house prices in even higher at the start of 2016.

If you need property advice or to get a quotation call PM Law solicitors in Sheffield on 0114 249 6926.

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