Property Investors Tax Update

 

Rishi Sunak’s summer statement has great news for property investors tax. SDLT on residential property up to £500,000 in value will be scrapped till 31st March 2021.Property investors tax update

 

Residential Rates on Purchases from 8 July 2020 to 31 March 2021

You will only start to pay SDLT on residential property you purchase over the value of £500,000. There changes will apply to you if its your first home and even if you have owned property before. Fortunately, these changes will apply to property investors tax also. You should note that you will have to pay the additional rate SDLT if you own more than one property. The following government link does not exclude Property landlords:-

“Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.

On the 1 April 2021 the reduced rates shown in the above tables will revert to the rates of SDLT that were in place prior to 8 July 2020.”

The table below should help you calculate any SDLT you owe on your purchases. you should note that the measures also apply to leased residential property. great news at this reduces the overall property investors tax burden.

SDLT rate on property Higher SDLT rates for additional properties
Property or lease premium or transfer value
Up to £500,000 Zero 3%
The next £425,000 (the portion from £500,001 to £925,000) 5% 8%
The next £575,000 (the portion from £925,001 to £1.5 million) 10% 13%
The remaining amount (the portion above £1.5 million) 12% 15%
New Leasehold sales and transfers
Net Present Value of any Rent
Up to £500,000 Zero
Over £500,000 1%

Contact the Finance Equation Ltd to see how we can assist you to submit on time and reduce your property taxes

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