These changes will come into effect from April 2016, in an attempt to raise an extra £1bn for the treasury by 2021.
This new surcharge will lift each band by 3%. In other words, if you are buying a property to let that is worth between £125,001 to £250,000, you will pay 5% instead of 2%.
However, it is believed that commercial property investors or those with more than 15 properties will be exempt from these new changes. Changes to Capital Gains Tax rules will also see landlords tighten their belts as from April 2019 any CGT will need to be paid within 30 days rather than at the end of the tax year as it is currently.
Our verdict: This reform could trigger a surge in the property market over the next couple of months as buy-to-let investors snap up properties before the changes come into effect in April. It is still clear though, that buying a suitable property for rental will at the moment continue to be a far better investment than most saving schemes, plus of course the capital investment in the property should continue to grow.
With this in mind, it is crucial to find an expert, letting agent that can provide sound advice on location, potential rental income and how to make the most out of your property portfolio.
For more advice on buying, selling or renting your property please call the office on 01243 532626.