Buy to let stamp duty surcharge and other related news

[d000hg]

Sell it you BTL scum where is MM going to live?

We tried, nobody wanted to buy it!

[DimPrawn]

We tried, nobody wanted to buy it!

Call yourself a friggin Christian?

https://www.thebiggive.org.uk/advice...ate-tax-payer/

[d000hg]

Call yourself a friggin Christian?

https://www.thebiggive.org.uk/advice...ate-tax-payer/

I have in all seriousness considered this kind of thing, or renting it to a charity for free (or just to cover costs of £100/month). It's a PITA having a house in a dodgy area and never knowing what might go wrong next.

[Martin@AS Financial]

Portfolio Landlords can save on stamp duty using tax loophole

Copied and pasted from Mortgage Strategy:



Landlords could rush to take advantage of a little-known stamp duty loophole after the Chancellor this week denied large investors a carveout on future hikes in the tax.

The Chancellor announced a 3 percentage point stamp duty surcharge on second homes and buy-to-let properties in the 2015 Autumn Statement.

The Treasury then consulted on exempting corporate landlords with 15 or more properties from the increased rates.

However, this week’s Government consultation response said the higher rates will be applied to all buyers regardless of size from 1 April.

But in an email to consultation respondents seen by Mortgage Strategy the Treasury says that landlords can claim multiple dwellings relief to offset the lack of stamp duty carveout for those bulk purchasing six or more properties.

The email says: “The Government also notes the existing flexibilities within the SDLT system available to significant investors in the property market, including multiple dwellings relief and the ability to pay the non-residential rates when purchasing six-or more properties in the same transaction. Both of these flexibilities will remain.”

An HM Revenue & Customs statement put out this week says: “Where two or more dwelling are purchased in a single or linked transaction multiple dwelling relief (FA2003/Schedule 6B) can be claimed. The higher rates will apply to claims for multiple dwellings relief.

“Where 6 or more dwellings are purchased in a single transaction the purchaser can choose whether to apply the non-residential rates of SDLT.”

The relief can cut stamp duty by a hefty margin. As an example, if a company bought 10 flats for £1m in total and claimed multiple dwellings relief, the firm would save £9,500 on a total stamp duty bill of £39,500.

The £30,000 figure is worked out by taking the average flat price of £100,000, multiplying by 3 per cent and then dividing by the number of flats.

Mortgage experts say the tax relief is not well-known but could now see wider uptake.

Bill Warren Compliance founder Bill Warren says: “I don’t think this is very widely known at all. It just comes down to the quality of advice that the multiple owners have been getting from their accountants or tax specialists.

“If the opportunity is there I’m sure landlords and multiple buy-to-let owners will be rushing to it if they can save a few bob.”

Fleet Mortgages chief executive Bob Young says: “This falls under one of those headings where not a lot of people know about it and not a lot of people are taking advantage of it.”

Chadney Bulgin mortgage partner Jonathan Clark says: “I doubt that many mortgage advisers will be aware of such a relief. I just wish that HMRC would publish a definitive guide to what is or isn’t available, as all of the uncertainty surrounding tax changes is damaging for the market.”

John Charcol senior technical manager Ray Boulger says: “It is not so much the Treasury offering investors an olive branch, as it is bringing people back to where they should be anyway.

“So my interpretation of that comment is the Treasury saying ‘look, we are effectively already giving people who are buying more than six properties the opportunity to save on stamp duty’.”

But Young says: “In terms of what use it is to people, the short answer is that if you are buying an awful lot of property, then fine. But if you are buying, as most landlords tend to, one or so properties at a time, I’m not sure it’s much use to you. People don’t buy half a dozen in one go.”

[filthy1980]

Copied and pasted from Mortgage Strategy:

great news for the corporate landlords

but for regular homebuyers who don't need / want to sell to buy, we're looking at an extra 10k just because an arbitary clock ticks over

[NotAllThere]

I have in all seriousness considered this kind of thing, or renting it to a charity for free (or just to cover costs of £100/month). It's a PITA having a house in a dodgy area and never knowing what might go wrong next.

I knew a couple who bought a house in a bad area of Newcastle for £15k (this was in the early 90s - we bought our first house out in the sticks, a 2 up, 2 down terrace for £22K). In the end, they abandoned it and eventually is was sold at auction of £8K.

Maybe you'll just have to do that.

[Martin@AS Financial]

great news for the corporate landlords

but for regular homebuyers who don't need / want to sell to buy, we're looking at an extra 10k just because an arbitary clock ticks over

100% agree - generally people don't buy 6 properties at a time so this is only going to benefit those with large portfolios. This seems to be a reversal on making companies / individuals who own more than 15 properties exempt from stamp duty.

[d000hg]

I knew a couple who bought a house in a bad area of Newcastle for £15k (this was in the early 90s - we bought our first house out in the sticks, a 2 up, 2 down terrace for £22K). In the end, they abandoned it and eventually is was sold at auction of £8K.

Maybe you'll just have to do that.

If we end up having headaches again (current tenant has been in a couple of years and actually pays rent) I might consider that given that we have the luxury to lose £20k - what price piece of mind?!

[Martin@AS Financial]

Bank of England clamps down on buy-to-let market with strict new rules for mortgage

Taken from City AM

The Bank of England has today revealed plans to clamp down on the buy-to-let market, setting out strict new rules for banks underwriting buy-to-let mortgage contracts.

In a new paper out today, the Prudential Regulation Authority (PRA) said lenders will need to meet a minimum set of requirements before underwriting buy-to-let mortgage contracts, including assessing the borrower’s ability to cover costs associated with letting out their property, such as tax liabilities. The PRA also said lenders will need to consider borrowers’ non-rental incomes, as well as whether they would be able to cope with future interest rate rises to levels as high as 5.5 per cent.

So-called portfolio landlords – people with four or more mortgaged buy-to-let properties – will also face extra scrutiny under the new rules.

The Bank said it expects the changes to underwriting standards will reduce banks’ anticipated gross buy-to-let mortgage lending by 10 to 20 per cent over the next two to three years. Buy-to-let lenders are currently expecting to increase gross buy-to-let mortgage lending by just over 20 per cent, on average, each year, according to the Bank.

The FPC said in today’s statement that it “remains alert to potential threats to financial stability from rapid growth in buy-to-let mortgage lending”, noting that the outstanding stock of buy-to-let mortgages rose by 11.5 per cent in 2015 alone.

The Bank has repeatedly warned that the buy-to-let sector poses a significant risk to the UK economy, and earlier this month, Sir Jon Cunliffe, deputy governor of the Bank of England for financial stability, said there was a risk that if large numbers of buy-to-let landlords were to sell their properties at the same time, there could be a “spiral of house price declines” across the wider housing market.

The FPC asked the Treasury for new powers to restrict the buy-to-let sector last year, and chancellor George Osborne told MPs last week that it is “highly likely” that he will give the FPC further responsibilities later this year given the “knowledge that the Bank of England has concerns about a bubble emerging in this market”.

"The measures I have taken in the last couple of fiscal events – on additional stamp duty, on changes to mortgage interest relief – have been done in the knowledge the Bank of England has concerns about a bubble emerging in this market,” Osborne told members of the Treasury Select Committee on Thursday, pointing to a new three per cent stamp duty surcharge on buy-to-let properties and second homes that is set to go into effect at the end of this week.

"It is highly likely we will give the FPC powers over the buy-to-let market. It is possible we can do that later this year.”

[DimPrawn]

meaningless twaddle. Will have no effect on BTL lending whatsoever.