What will the April stamp duty changes bring us?

Recently, Chancellor George Osborne has announced legislative changes concerning the stamp duty and mortgage relief amendments. This is fresh news and the changes will be effective starting this April. If you’re wondering what these changes bring and what they mean for you, read on to find out.

The Summer Budget revealed that starting from April 1st, 2016, the people who buy their second homes or buy a property with the purpose to lend it in England and Wales will be facing additional costs. An additional 3% stamp duty will have to be paid by these homeowners. This would mean that if you buy-to-let a property that costs around £184,000, you’ll be paying around £5,000 more than you would before this legislation change.

As for the changes concerning the mortgage relief, the impact on landlords will also be significant. The mortgage application process will be changed so that the landlords also have to complete the checks to prove that the income from renting the property will be significant enough to cover the mortgage costs.

Even then, there are no guarantees you’ll get an interest-only loan.

Why?

Well, the government has decided to restrict this finance.

In addition to all these setbacks, the next year will bring the cutting of mortgage interest relief on the properties used for rent. The new system that is to be introduced will permit the landlords to deduct nothing more than the precise cost of expenses. However, not everything is going to be bad for the landlords. The possibility of conducting new Right to Rent checks will help the landlords avoid the £3,000 fine that’s paid for renting to an illegal immigrant.

If you’re a landlord and you own less than 15 properties, you’ll have to pay the additional 3% on all properties you buy for more than £40,000. However, if you want to stay in the business, there are many things you can do to make it work.

One of the things is to increase your rental charges to compensate for the additional costs.

Another positive thing about the law is that even though you have to pay the additional 3% now, you may be able to get the money back through capital gains tax years later, when you decide to sell the property.

For the people living in rented accommodation, this will probably mean increased rental costs that can seriously affect a family budget.

As such, now is the time to buy.


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