Budget 2016: Another Nail In The Coffin for The Buy To Let Market16 March 2016
Budget 2016: Another Nail In The Coffin for The Buy To Let Market
David Smith, Director of Financial Planning at Tilney Bestinvest, comments on the impact of today’s Budget for the Buy-to-Let market:
“In the Autumn Statement, the Buy-to-Let industry was dealt a blow with a hike in stamp duty of 3% across the board. Rates of 0% on the first £125,000 of purchase price, 2% on the next £125,000, 5% on the next £675,000 etc., would increase to 3%, 5% and 8% (and so on) for all Buy-to-Let and second homes purchased from 1st April 2016. This represented an increase of £7,500 on the stamp duty payable on a £250,000 purchase, or a huge £15,000 extra for a £500,000 purchase.
“In his Budget today, the Chancellor seemed to initially give the industry hope by announcing a reduction in Capital Gains Tax by a whopping 8%, from 18% for Basic Rate Taxpayers and 28% for higher and additional rate taxpayers to just 10% and 20% respectively for all gains. However, the champagne corks hadn’t even had a chance to pop before the chancellor delivered another sucker blow to the flailing industry by announcing that the reduction would not apply to those selling residential property.
“If the reduction had been applied to residential property, it would have inadvertently caused a short-term tug of war between buyer and seller in terms of when the sale should go through, and therefore a potential issue has been averted. However, the omission of Buy-to-Lets and second homes from this new, extremely beneficial, tax regime underlines the Chancellors commitment to bringing the industry to heel.
“The future of the residential property market and private rental space is becoming increasingly unclear, as the attractiveness of the Buy-to-Let-market deteriorates at an ever increasing pace. Indeed many individuals would be wise to now look for their property ‘fix’ through other avenues, such as commercial property or pooled property based investment funds.”
To discuss the Budget or any other financial planning topic please contact David Smith on 0191 269 9970 / firstname.lastname@example.org
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The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested.
This article is not advice to invest or to use our services. If you are in doubt as to the suitability of an investment please contact one of our advisers.
The above article is based on our interpretation of the Budget 2016 and related legislation; it is not intended as advice, and the impact of any changes to tax rates or allowances will depend on your personal circumstances.
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About Tilney Bestinvest
Tilney Bestinvest is a leading investment and financial planning firm that builds on a heritage of more than 150 years. We look after more than £9 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.
We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.
We have won numerous awards including Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.
Headquartered in Mayfair, London, Tilney Bestinvest employs over 400 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.
The Tilney Bestinvest Group of Companies comprises the firms Bestinvest (Brokers) Ltd (Reg. No. 2830297), Tilney Investment Management (Reg. No. 02010520), Bestinvest (Consultants) Ltd (Reg. No. 1550116) and HW Financial Services Ltd (Reg. No. 02030706) all of which are authorised and regulated by the Financial Conduct Authority. Registered office: 6 Chesterfield Gardens, Mayfair, W1J 5BQ.
For further information, please visit: www.tilneybestinvest.co.uk
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.