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Stamp Duty on Investment Property

Good news for investors! The SDLT concession introduced on 8th July 2020 also applies to you – up to a point! This means that there is no standard Stamp Duty Land Tax (SDLT) on the first £500,000 of any purchase! Hurray! However, if you’re buying a second home, Buy to Let, or investment property, you should be aware that the additional “second home” 3% on top of the standard SDLT amount payable still applies. But this SDLT concession could still save you up to £15,000, at least until March 2021.

Of course, if you are in a fortunate enough position to be able to buy an investment property or second home, then yes a £300,000 purchase will cost you £9,000 more than if it were your principal residence, but under the new regime, this is still £2750 less than you would have paid.

One frustration for investors is that this 3% may have to be found in cash if the additional amount pushes you over your Loan-to-Value ratio as purchase costs such as SDLT may not be included in any mortgage borrowing.

Nevertheless, property remains one of the most reliable investments available and we are continuing to see strong yields for the savvy investor in this area. The old adage of “not letting the tax tail wag the investment dog” is probably worth considering! This is especially true as we are already beginning to see property prices rise as a result of the rapid renewal of interest from homebuyers and investors alike under the post-pandemic SDLT concession.

You can be assured that our local knowledge and property expertise will guide you both through the process towards a successful outcome, irrespective of SDLT as our role as investment managers is to help you maximize your return on that investment. Please feel free to contact us today for straight-talking investment advice on 020 8359 3399.

© Copyright 2020 Richard Rawlings except as  excluded under licence.