Landlords lose in Osborne's autumn budget
  • 26th Nov 2015
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Backtracking on the contentious cuts to Working Tax Credits caught the headlines when Chancellor George Osborne delivered his Autumn Budget statement, alongside a boost to building and good news for first time buyers, but Landlords lose out.

The Chancellor announced the allocation of £4 trillion of public spending over the next four years, with an £8 billion reduction in borrowing now being forecast and a predicted surplus of £10 billion by 2019-20. 

For landlords looking to add buy to let properties to their portfolio (and second home owners), the Chancellor dealt another blow by announcing a massive 3% extra levy in land tax stamp duty on such purchases with effect from April 2016.  The money raised will be used to fund investment in local communities.   This follows on the heels of his last Budget when he announced that there would be a cut in tax relief on mortgage interest for landlords.  Tax relief is set to be gradually restricted to the basic rate, currently 20%, where landlords had previously been able to offset mortgage interest against top rates of tax.  The shift was to tackle what the Chancellor called an “unfair advantage” for landlords over homeowners. 

In a package of measures designed to help with housing, Mr Osborne announced a doubling of the housing budget to £2bn a year, to fund 400,000 new affordable homes by the end of the decade, to both buy and rent.  Help to Buy has been extended with restrictions removed on shared ownership schemes, so more people can get on the housing ladder.  There’s also a new Help to Buy equity loan scheme that will give London buyers 40% of the home value from early 2016, doubling the 20% offered under the current scheme.

Vicky Stoodley who heads the Property Developer and Investment sector team said:   “Landlords have been in the Chancellor’s sights for some time, with high levels of buy to let pushing up house prices and reducing affordability for first time buyers.  Buyers of second homes will also be caught by this new rate of stamp duty on their future purchases.  With the policies he set out today, it’s likely to reduce some heat in the housing market, once the new stamp duty level kicks in.”   

“The other sting in the tail for landlords and others making capital gains is the shift towards faster digital taxation processes.  Mr Osborne has ambitions to build one of the most digitally advanced tax systems in the world and one result of this will be faster collection of capital gains tax, which is payable on any gain made by a landlord or second home owner on a property when they sell up.”  

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