Stamp Duty Changes: Will Your Property Be Worth As Much?
On 1st April this year, new stamp duty rules will be introduced that will create more expense for those buying second homes and buy-to-let properties.
When the stamp duty changes come into force, these types of purchasers will have to pay 3% more on each stamp duty band than usual. Buying to let is therefore becoming a pricier business.
With completion bills thus set to rise by several thousand pounds, there could be a knock-on effect on the value of property. After all, savvy investors will be looking to get the best price possible in order to minimise the extra costs.
The surcharge will apply to all properties costing over £40,000. This means that for investors, even the cheapest properties (those up to £125,000, which are normally exempt from stamp duty) will now incur a charge of 3% of the sale price. On a £200,000 property, that’s a £6,000 fee, which is hardly small change to most people.
At the other end of the spectrum, buy-to-lets or second homes worth £1.5 million or more will be subject to a whopping 15% stamp duty tax. That equates to at least £225,000!
Importantly, the Capital Gains Tax rules are changing for investors at the same time – the tax will have to be paid as soon as a purchase is made, rather than by the end of the tax year as has been the case until now. Investors will have to find even more ready cash, therefore, in order to complete on a property purchase.
All this means that it if you are thinking of selling your property, now is the time to do so. Experts are predicting that the property market could experience a slowdown in spring and summer as a result of the new stamp duty charges. As Cory Askew of Chestertons told The Guardian, ‘If we have the surge in demand now we can only assume it will quieten down in April, or there will be strong negotiation by buyers’.
In other words, there’s a risk that property prices will fall this summer as fewer people commit to buying and sellers are thus forced to accept offers below their expectations.
The good news is that here at Julie Twist Properties, demand is currently outstripping supply – we have potential buyers waiting to get their hands on the right Manchester properties as soon as possible. Our investors are rushing to add to their portfolios before they face these increased stamp duty charges, which means that you could benefit from a super-quick sale before April.
If you place your property on the market with us now, you could secure a sale and complete before the stamp duty changes come in! Don’t delay – call us today to arrange a valuation.
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