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Advice for property landlords on stamp duty changes in 2017

December 21, 2016

Advice for property landlords on stampy duty from Optimise Accountants

By Louise Misiewicz

Our team of property tax specialists at Optimise Accountants have been taking a closer look at the impact of stamp duty changes on property investment recently, following a few calls and emails from concerned property investor clients who’ve been worried by industry news and reports in the Press.

I thought it would be useful to highlight current industry thinking around the topic, as well as giving a few handy hints and tips from our property tax experts, to ensure that property investors are put in the know.

What impact have stamp duty changes had on property investment in 2016?

We talked in an earlier blog post here this year about ways of managing the 3% stamp duty surcharge, and some of our property investment clients found it an extremely useful resource to refer to during 2016.

It was recently reported here that stamp duty changes introduced on 01 April, 2016 have been driving up the acquisition costs of buying houses for property investors, effectively slowing down UK property investment.

We’ve observed industry news claiming that the stamp duty changes are heavily impacting both the Treasury AND buy-to-let property landlords. If you’re concerned or confused about stamp duty land tax changes, please feel free to get in touch with us here.

The main changes brought about as a result of the stamp duty changes are:

  • Anyone who buys additional residential property, including second homes and buy-to-lets, will have to pay an extra 3& in stamp duty from April 01, 2016.
  • The additional charge applies above the current stamp duty land tax rates. This means there will be 3% tax (currently zero) to pay on homes worth up to £125,000, 5% tax (instead of 2%) on homes that cost between £125,001 and £250,000, and 8pc (currently 5%) on homes worth between £250,001 and £925,000.
  • Homes worth up to £1.5m will be subject to 13pc stamp duty and those over this amount will incur a 15pc charge.
  • This means that someone buying a £450,000 house will have to pay an extra £13,500 tax.
  • Anyone buying a second home has 36 months to sell their original property. They can then get a refund on the extra tax.
  • In addition, anyone who sold their home before November 2015, but does not currently own their own home, has until November 2018 to buy a home without paying the SDLT surcharge

What impact will stamp duty changes have on property investment in 2017?

Some of the stamp duty changes are already being felt – according to industry sources, the amount of revenue the Treasury has taken in stamp duty land tax has fallen by £500 million since it introduced the  3% surcharge rate.

It’s been estimated by property group London Central Portfolio that the drop in £1 million-plus homes changing hands has led to £500 million drop in stamp duty revenues in the first six months since the tax was introduced.

The sharp fall in transaction amounts is due in part, I think, to property investors not wanting to pay the higher tax – which on a £10 million home, for example, would add up to £1.4 million in tax.

Who else do the stamp duty changes impact?

The stamp duty changes may also potentially impact first-time-buyers and property investors in 2017, as the Government was planning on using the extra money raised from stamp duty changes to build more affordable homes during 2017.

It remained to be seen if this will be the case, given that it has been estimated that the drop in stamp duty revenues could increase to £1 billion for the full 2016-17 tax year.

As leading property tax specialists, I and my team are monitoring developments in this area closely.

To find out more about opposition from property investors to the stamp duty changes this year, and how petitions can be filed with Government, please visit here.

To find out more about how our team of property tax specialists can advise you further on stamp duty land tax changes in 2017, please feel free to get in touch here.

How to engage with us

If you want to understand how to implement this strategy or to discuss other finance/tax questions, then please book some time with us using the below calendar.

Please use the redeem code “Article 33” to get 33% off your next consultation call.

If you are looking for a new property tax specialist accountant, then please book some time with us using the below calendar. Please note that this booking is to describe our services and will not be used to discuss your personal tax affairs.



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Telephone: 0115 939 4606
Email: simon@optimiseaccountants.co.uk