Buy-to-let property will attract a 3% stamp duty surcharge from April next year – and other taxes will rise too.
The policy has been greeted with fury by landlords and other industry figures, who were already reeling from other recent measures, including tweaks to mortgage interest tax relief.
Robert Pullen, the tax manager at Blick Rothenberg LLP, looked into the future, noting: "This is likely to cause initial spike in house prices as investors rush to buy, but the long term impacts are not known. It could result in even larger rent costs as landlords seek to recover the new tax."
While Pullen was looking ahead, David Cox, managing director of the Association of Residential Letting Agents, looked into the past, describing the news as "catastrophic… especially following the recent changes to mortgage interest tax relief and the annual wear and tear allowance".
Source: The Week
We may need George Osborne’s brick-laying skills - his plan to build 400,000 new homes could flounder if enough trained builders can’t be found. It may also bring little short-term help to renters.
Frank Nash, Partner at Chartered Accountants Blick Rothenberg, explains: "The chancellor has openly admitted that more affordable housing, including the private sector, needs to come forward to allow people to become owner occupiers and achieve their aspirations. However, it will take at least five years and, until those homes are built, young families have no choice but to rent. The problem is that until these new homes are built, private rented property is price inelastic. Landlords need to protect their investment and are expected to pass the cost on in the form of higher rent. This reduces a tenant’s ability to save a deposit for a home of their own, and in turn their ability to make best use of the range of the Help-to-Buy initiatives."
Source: The Guardian
The abandonment of cuts to tax credits may not be quite the good news it seems. The headline-grabbing decision to reverse plans to reduce tax credits will leave some working families around £1,000 better off than they would have been under the original plans. However many workers will still end up worse off as tax credits are replaced by universal credit.
Assumptions used in the tax tables published in this article have been provided by London Chartered Accountants, Blick Rothenberg. Tables completed by Paul Haywood-Schiefer ATT, Blick Rothenberg LLP.
Source: The Independent
The Autumn Statement was good for pensioners, bad for landlords. No changes to income tax or national insurance were announced. Autumn Statement: Key personal finance points:
Tax credits are being phased out anyway as we introduce universal credit.
2pc council tax add-on: Powers to local authorities to charge an extra 2.5pc on council tax to be spent on local social care, such as care homes.
ISAs: The Isa limit will be kept at £15,240 for 2016/17, it was confirmed. The Junior Isa and Child Trust Fund limits will be kept at £4,080.
Buy-to-let hit no.1: Extra 3pc on usual rates of stamp duty for landlords from April 2016. It will raise £1bn by 2021, to go toward housebuilding in priced out areas.
Autumn Statement tax calculator created by Blick Rothenberg.
Source: The Telegraph
Someone buying an additional property worth £150,000 will pay almost eight times more in tax after the change than they do today. A rise in the tax that landlords and second home owners pay to buy a property could be “the final nail in the coffin” of buy-to-let, according to experts. Changes announced in the Spending Review and Autumn Statement today will add 3 percentage points to the rate of stamp duty paid by those who already own property from April 2016.
As a result, the tax bill on a buy-to-let property costing £250,000 will jump from £2,500 to £8,800.
More examples are in the table created by Blick Rothenberg, the full article can be found online at The Telegraph.
Source: The Telegraph
The potential for this to end badly is real, and it won’t be just the Chancellor’s tax avoidance targets that suffer along the way. It will be at the heart of a digital revolution while delivering billions of pounds to the Exchequer by putting the squeeze on tax avoidance and evasion.
The workforce is supposed to be smaller but more highly qualified. Which is where the other problem comes in. Frank Nash, a Partner at accountancy firm Blick Rothenberg, tells me that Gordon Brown’s introduction of self-assessment, which called for us taxpayers to calculate our liabilities as opposed to the HMRC doing it, resulted in the organisation de-skilling.
As Mr Nash points out, the payment of capital gains tax on the sale of properties other than the family home has also been brought forward. Instead of 31 January after the preceding tax year, it will be due within 30 days.
Source: The Independent
The Chancellor George Osborne in his spending review today announced that he will increase Stamp duty for Buy to Let properties and second homes with a surcharge of 3% from April 2016.
Genevieve Moore, Tax Partner, at London Chartered Accountants Blick Rothenberg LLP said: “The Chancellor continues to raid the pockets of buy-to-let owners, now with an increase in Stamp Duty Land Tax (“SDLT”) on acquisition. Whether the additional costs of acquisition will be passed on to future tenants in an attempt to achieve the targeted return on investment remains to be seen.”
Frank Nash, Partner, at Blick Rothenberg LLP said: “It is going to be challenging to police the SLDT surcharge for second homes – a purchaser could easily declare the new home as their main residence immediately.”
Robert Pullen, Tax Manager, at Blick Rothenberg LLP said: “Buy-to-Let purchases from April 2016 will suffer an additional 3% SDLT. This is likely to cause initial spike in house prices as investors rush to buy, but the long term impacts are not known..."
Source: Property 118.com
Chancellor George Osborne announced sweeping changes to take effect from April 2019, which would require any payment on account of any capital gains tax (CGT) due on residential property to be made within 30 days.
Blick Rothenberg Partner, Genevieve Moore says that collection of CGT on residential properties needs thinking about since people pay tax at different rates and may have used their annual exemption elsewhere.
‘I would suspect that lawyers may be responsible for withholding a flat rate, say 28% of the gain or disposal and the taxpayer would then need to complete a tax return in order to claim any refund of tax they may be due. This would put onus on the taxpayer to reclaim rather than on HMRC to chase the tax due. Remember though, for the majority of the population selling their only home the sale will be exempt from CGT and so no tax will be due,’ she added.
Source: Accountancy Live
In this year’s Autumn Statement, George Osborne, the chancellor, made headlines by climbing down on planned cuts to family tax credits and slashing spending on government departments.
A stamp duty surcharge of 3 per cent for buy-to-let and second home buyers, to be introduced from April 2016, comes as a further blow to landlords following limits on mortgage interest tax relief announced in the summer Budget. The government is looking to close the net further on tax avoidance, with arrangements saving homebuyers stamp duty in the line of fire. Penalties for so-called “serial” tax avoiders will also be introduced, as well making it an automatic criminal offence for individuals who fail to declare taxable offshore assets. Pension credit payments will be stopped for people who leave the country for more than a month
Tax tables mentioned in the full article on Financial Times have been created by Blick Rothenberg.
Source: Financial Times
So now we know - more money for house building and higher taxes for landlords. But how will YOU be affected. Find out with the calculator by Blick Rothenberg
Changes to taxes, pensions and the rules for buying homes have all been announced as part of Chancellor George Osborne's Autumn Statement.
But once the bluster is cut through and the maths done will the cuts make you better or worse off.
We asked the experts at Blick Rothenberg - a leading, independent firm of chartered accountants - to run the numbers and work out what it means in terms of cold-hard cash.
Source: The Mirror