Buy-to-let activity eases

by | Jun 8, 2016

The slowdown in growth follows a surge in buy-to-let activity before the introduction of new stamp duty land tax (SDLT) rates on 1 April 2016.

50% of properties sold in the last 2 weeks of March went to landlords, while February 2016 saw a 61% year-on-year increase in buy-to-let loans, according to the Council of Mortgage Lenders.

Property tax changes

A 3% SDLT surcharge was introduced for purchases of additional residential properties from 1 April 2016. Similar changes were made to land and buildings transaction tax in Scotland.

Other tax changes may also affect individuals who are buying or selling second homes or buy-to-let properties. The wear and tear allowance has been replaced by a relief that enables landlords to deduct actual costs from a property.

Private residence relief means that capital gains tax is not usually payable on gains when you sell  your main home. If this does not apply, the tax rates for 2016/17 are 18% for basic rate taxpayers and 28% for higher rate taxpayers.

 

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