One of the biggest recent news stories has been the 2016 Budget, which was announced this week by Chancellor George Osborne. There were several new developments which will prove to be highly significant to property investors, landlords and those who are planning on purchasing a home.
One of the most important announcements was the fact that buy-to-let residential property sales will be excluded from the cut in Capital Gains tax (a tax paid when you sell an asset which has gone up in value), which means landlords will still pay the original rate of 28% when they sell their investments; for other types of assets, the rate will be lowered to 20%.
In last year’s Autumn Statement, it was revealed that from April 2016 an additional percentage of stamp duty would be brought in for second homes and any additional investment properties, a rule which would inevitably have the greatest impact on buy to let investors who own multiple properties. In the latest budget, it has been made clear that this will still apply, but now people who own two properties that have overlapped will have 36 months during which they can claim refunds on the higher rates. So, for example, people who own two homes but are currently trying to sell one will have a chance to avoid being unfairly charged. Landlords will still be affected.
There was good news for those who are saving up to buy their first home. It was announced that people under the age of 40 will be able to open “Lifetime ISAs”, which can be used to save up to £4000 per year. For every £4 saved, the government will add an extra £1, and the money can be used for retirement or to pay a deposit on a home. Digital “micro-entrepreneurs” will be given a tax allowance of £1000, including people who rent rooms in their home on sites such as Airbnb.
If you own a property investment in the City of Westminster or any other part of London, or if you are considering purchasing a buy to let property, it is always advisable to receive professional advice and support to ensure you are up to date with all the latest developments in the property market. Here at Finefair we specialise in managing every aspect of London property and can advise you on dealing with the latest changes in stamp duty, tax and all other property-related matters. Please contact us today to get the knowledgeable support you need.