Great News For Landlords And Property Owners

We recently read that a landmark court case found that buyers purchasing uninhabitable properties shouldn't have to pay the extra stamp duty surcharge on second homes; great news for landlords and property owners

Since 2016, there has been an extra 3% stamp duty tax on second properties bought as an addition to the buyer’s home; meaning before the buyer had even commenced work to bring the house back to a liveable condition, they had to shell-out more to the tax-man.

Now homebuyers, buy-to-let investors, and developers buying an additional property might be able to cut out the surcharge if the home is derelict! In a recent article, The Times analysed the impact of a tax tribunal in Bristol ruling in favour of two homeowners. For £200,000,the couple bought a derelict bungalow located in Weston-superMare as a buy-to-let investment and second property. The bungalow was infested with asbestos and didn’t have central heating, so they completely demolished it and built a new home.

Even though HMRC tried to argue the buyers should have to pay the higher rate of stamp duty if the property could be used as an abode in the future, the tribunal said the charge should only apply if the home is immediately habitable; which it was not. This came as exciting news for investors and developers. The ruling could allow previous buyers who paid the extra charge for an uninhabitable property to claim money back, circa millions of pounds no doubt…

Additionally, the outcome of this case could encourage more developers and property investors to buy the eyesore derelict buildings to renovate. Recently, there have been a lot of tax changes for landlords and buy-to-let investors, which have made it more difficult for them to make a profit on their affairs, so this recent ruling is likely welcome news. If you’re a landlord or property investor and want to know what you’re entitled to, give us a call at Advanced Funding Solutions.

We can help you find practical and affordable funding solutions as well as give you the most up-to-date industry information regarding your tax affairs.