Buy to let mortgage demand rise before tax changes
If you wish to buy an investment property now is the time to do this with the introduction of a 3% tax surcharge being added to the purchase price of properties being bought for investment purposes or for a second home. This extra cost will be added to the existing Land and Buildings Transaction Tax (LBTT) and has triggered an increase in demand for BTL mortgages. This was introduced in the UK Government’s Autumn statement in November 2015 and the Scottish Government decided in December to follow, and therefore the new tax will take effect April 2016. Please see below for the proposed rates:
|Purchase price||Existing LBTT rate||Additional Homes Supplement|
|Up to £145,000*||0%||3%|
|Above £145,000 to £250,000||2%||3%|
|Above £250,000 to £325,000||5%||3%|
|Above £325,000 to £750,000||10%||3%|
*Supplement only payable on transactions on or above £40,000.
Please remember that this does not affect any current properties owned by landlords and only affect landlords with up to 15 properties. It is likely that an unintended consequence will see rent levels rise.
However owning an investment property is still a good investment with attractive mortgage rates and low interest rates on savings at present. At Mavor&Co. we can help you with buying your first property or adding to your investment portfolio, please do not hesitate to contact us for further free impartial advice on 01506 870204 or by email at firstname.lastname@example.org.