Announced in yesterday's Autumn Statement, the chancellor continues his attack on property investors. Not only will tax relief on interest payments now be greatly curtailed, but from 1 April 2016 higher rates of SDLT will be charged on purchases of additional residential properties (above £40,000), such as buy to let properties and second homes.
The higher rates will be 3 percentage points above the current SDLT rates. These higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.
The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate. This would seem to imply that smaller corporates, such as family investment companies may be affected by the proposed changes.
Also, from April 2019, a payment on account of any CGT due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal. This will not affect gains on properties which are not liable for CGT due to Private Residence Relief. The government will publish draft legislation for consultation in 2016.
One has to ask if this is genuine tax policy, or merely using tax as the tool with which to discourage small individual property investors in order to open up the property market for first time buyers. If that is the case, then Mr Osborne has far more to do as the current crisis is far more complex than simple supply and demand...
The higher rates will be 3 percentage points above the current SDLT rates. These higher rates will not apply to purchases of caravans, mobile homes or houseboats, or to corporates or funds making significant investments in residential property given the role of this investment in supporting the government’s housing agenda.
The government will consult on the policy detail, including on whether an exemption for corporates and funds owning more than 15 residential properties is appropriate. This would seem to imply that smaller corporates, such as family investment companies may be affected by the proposed changes.
Also, from April 2019, a payment on account of any CGT due on the disposal of residential property will be required to be made within 30 days of the completion of the disposal. This will not affect gains on properties which are not liable for CGT due to Private Residence Relief. The government will publish draft legislation for consultation in 2016.
One has to ask if this is genuine tax policy, or merely using tax as the tool with which to discourage small individual property investors in order to open up the property market for first time buyers. If that is the case, then Mr Osborne has far more to do as the current crisis is far more complex than simple supply and demand...
