Chancellor Alistair Darling has delivered his last budget before the General Election, but after much anticipated waiting to see what it would hold, sadly the needs of landlords have been largely overlooked.
The big property news was that the threshold for Stamp Duty Land Tax would be increased from £125,000 to £250,000, for two, but that it would only be applicable for first-time buyers. Although it’s definitely good to give first-time buyers a helping hand onto the property ladder, many other buyers are feeling left out of the loop.
In fact, the outlook for some landlords may not be looking too good. A new 5% rate of Stamp Duty Land Tax will be introduced in 2011-2012 for property transactions costing over £1m. Although at first glance, most landlords may look to be unaffected by this, it looks like it will apply to both individual property purchases (e.g. expensive homes) and the purchase of property portfolios.
For any landlords or property investors thinking of buying property in bulk to form a new portfolio could find their purchases attracting much higher Stamp Duty tax bills in the future.
The budget also discussed changes being made to the way in which Local Housing Allowance (LHA) rates are calculated. The market areas used to work out the rates of LHA are going to be adjusted, which will remove the properties with the highest rents.
What do you think of this year’s budget? Are you disappointed that there’s nothing more positive for landlords?
This budget could have been so much more. I am very disappointed but not surprised.
I suspect that due to the fact the Government have to reign an enormous amount of cash due to the UK deficit, the Buy to Let sector will be an easier target. Landlands will be taxed as it will be assumed they can afford it.