Buy-to-let landlords have paid £700m to HMRC within 6 months

£700m was given by buy-to-let landlords to HMRC in the six-month period following the imposition of 3% stamp duty on second homes back in April.

The surcharge was first raised by then chancellor George Osborne in 2015 as a means of restricting the fast-growing buy-to-let market.

Changes now phased in mean landlords would pay 5% stamp duty on second houses with a value of £125,000 – £250,000, as opposed to just 2% previously.

86,400 additional properties have been purchased since April as buy-to-let landlords seek to act before tax relief changes take effect in April 2017. This has enabled HMRC to collect double the amount from additional properties as they had done previously.

Both buy-to-let landlords and The Bank of England have expressed concerns about recent government changes to the buy-to-let market.

David Cox, of the Association of Residential Letting Agents, commented: “While landlords are the ones paying the tax, it is in fact tenants that are footing the bill in higher rents.”

The Bank of England has gone so far as to state that the new buy-to-let rules have put the country’s financial stability at risk.

Economists are concerned that rising interest rates could lead buy-to-let landlords to sell their properties en masse, flooding the market and causing house prices to drop off sharply.

While it’s unclear whether these fears will come to fruition, the buy-to-let sector is already undergoing radical changes that look set to continue.

Call on 3 Wise Bears and get more expert advice on buy-to-let taxation.