The SDLT also affected commercial rates. Previously SDLT for commercial property transactions was charged on the old-fashioned “slab” basis rather than the marginal basis brought in for residential property in December 2014.
However, the chancellor announced from 17 April 2016 commercial property would be brought into line with the SDLT and thresholds for non-residential rates, with various bands.
The 2015 stamp duty hike was aimed at higher-earning landlords, so those who pay 40 per cent or 45 per cent income tax were set to be greatly affected, and market commentators last year warned that a hike on SDLT could push more people into the higher-rate bracket.
As the Council of Mortgage Lenders pointed out in 2015, imposing an extra 3 per cent tax on purchases could make some properties at £125,000, which are currently exempt, subject to this tax for the first time.
However, the current chancellor, Philip Hammond, has confirmed higher personal allowances, so this might go some way to mitigating the numbers of landlords who risk being pushed into the higher-rate bracket.
Basic tax payers on a standard tax code will see their personal allowance rise from £10,600 to £11,000 on 6 April 2016 and again to £11,500 on 6 April 2017.
The threshold at which higher rate tax becomes payable by individuals with standard tax codes will also rise, from its current level of £42,386 to £43,000 this April and £45,000 in April 2017.
Capital gains tax
There was also another snub to landlords in the 2015 Autumn Statement, when Mr Osborne laid out changes to the manner and timing of capital gains tax (CGT) payments.
This meant any CGT payments must be made within 30 days of a sale of a buy-to-let property from 2019 onwards, whereas previously the payment could be deferred by up to 21 months.
Then, in 2016, Mr Osborne said CGT would fall from 28 per cent to 20 per cent for higher rate tax payers and then from 18 per cent to 10 per cent for basic rate tax payers.
While this was good news for investors in stocks and shares, these new, lower rates will not be applied to gains on residential property or carried interest, for UK residents or non-residents.
This could have a knock-on effect on those landlords seeking to use SPVs to mitigate the effects of SDLT. Mr Hollingworth explains: “Switching existing property into a company will result in stamp duty being payable and a potential CGT liability.”
Accidental landlords and other legislation
In November 2015, Mr Osborne said the increased stamp duty rate will apply where, at the end of the day on which a property is acquired, the individual concerned owns two or more residential properties and is not replacing his or her main residence, which has been sold within the last 18 months.
This would have seriously affected accidental landlords, who may have inherited a property from their parents or grandparents.
