Magee Gammon News Changes to the buy-to-let property market

Changes to the buy-to-let property market

The buy-to-let market is set to change following Chancellor George Osborne’s announcement last November that landlords would pay a three per cent Stamp Duty Land Tax (SDLT) surcharge, with effect from 1 April 2016. 

In addition, mortgage interest tax relief changes, due to be phased in from April 2017, will mean thousands of buy-to-let landlords will see their profits significantly reduced from next year.

In addition, a 30-day limit for the payment of capital gains tax on the sale of buy-to-let property, rather than the current requirement to pay it at the end of the tax year, will be in place from 2019.

Whilst some landlords are rushing to the auction rooms to snap up properties before the new stamp duty takes effect, others are looking to the future and are ‘cashing out’ before next year’s tax relief changes erode their profits.

The Association of Residential Letting Agents (ARLA) has said that the three per cent stamp duty surcharge for investors has had an immediate impact, with a quarter of agents reporting an uplift in interest from landlords looking to purchase a buy-to-let property in time to beat an increased tax bill.

The report came as speculation mounts over what effect SDLT reforms around buy-to-let and second properties announced in the Autumn Statement of 2015 will have on house prices and rents.

According to an ARLA survey, 62 per cent of agents predict the changes will result in higher rents while 65 per cent say it will push landlords out of the market and decrease the supply of homes to rent.

Link: Association of Residential Letting Agents (ARLA)

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