Higher stamp duty payable from April 2016
Buy-to-let landlords and people buying second homes from April this year will have to pay a 3% surcharge on the stamp duty charged for the property.
Chancellor George Osborne made the announcement during his Spending Review and Autumn Statement last year. From April, you will have to pay a 3% surcharge on the stamp duty charged for the property, set to raise an extra £1bn extra for the Treasury by 2021.
Buy-to-let landlords are already due to receive a lower rate of tax relief on mortgage payments. In his summer Budget, Mr Osborne said that landlords would only receive the basic rate of tax relief – 20% – on mortgage payments, a change being phased in from 2017.
Up to £60m of the money raised from the stamp duty surcharge will go to help homebuyers in England in places where holiday homes have forced up local prices.
Help to Buy
The Help to Buy (equity loan) scheme in England will also be extended to 2021, one year longer than planned.
An extension to the scheme in London will see buyers who can find a 5% deposit given a loan worth up to 40% of the property. The loan will be interest-free for five years. Elsewhere, the existing maximum loan is for 20% of the property’s value.
In total, the Government will put an extra £6.9bn into housing. This includes an extra £2.3bn for the Government’s starter homes programme, and £4bn given to housing associations and local authorities to build more homes for shared ownership.
Another £200m will be used to build homes for rent, which will allow tenants to save for a deposit. There will also be a pilot scheme to trial the Government’s Right to Buy programme for housing association tenants. Five housing associations will take part to help design the final scheme.