Today I’m recording a quick video to let you know about some of the changes which will affect you when buying or owning a buy to let property.
So today is the 1st of April and in comes the higher rates of Stamp duty tax, so anyone buying an additional property from today will pay the new rates of stamp duty which are 3%, 5% and 8% respectively. So if you are buying a house that’s not your one and only home, you will need to pay the additional rate of stamp duty.
There is a bright side to this though; it is going to be reclaimable on the sale of the property so it can be off set on your capital gains when you come to sell – so not all bad news.
There are also some changes happening to mortgage interest relief. From 2017 mortgage interest will now be counted as a taxable income and you will only receive relief on this if you are a basic rate tax payer.
This means that if you pay income tax at the basic rate of 20%, you won’t see any change in the amount you owe. However Landlords who are basic rate tax payers may be affected as you could be pushed in to the higher rate tax bracket.
It’s gradually being introduced over 4 years and is due to be fully in force from the 20 20 / 20 21 tax year, now these rules can change and will depend on your own circumstances but I thought it was worth mention and I would always recommend you take your own independent tax advice.
I hope you’ve found this video useful and if you have buy to let question, I’m happy for you to pick up the phone and pick my brains! I’m Katherine Bond from Northwood Northampton and you can call me on 01604 607080.