Changes to stamp duty legislation saw a 3% surcharge levied on newly-bought second homes and subsequent properties, according to research from Direct Line for Business.
Any landlord paying the UK average house price of £219,544 for an additional property in December 2016 faced a stamp duty bill of £8,477. This is £6,586 more than they would have previously had to pay.
Landlords in London have been affected the worst, with stamp duty standing at £28,704 on buy-to-let properties worth an average of £483,803.
In addition, fines of £30,000 will be handed out if landlords fail to licence an address under the recently introduced Houses in Multiple Occupation and Residential Property licensing reforms.
Further fines of up to £3,000 are in place if landlords do not conduct the necessary checks or lack the right documentation for their tenants.
Christina Dimitrov, Business Manager at Direct Line for Business, said:
“Being a landlord in the current climate can be a profitable business, especially if there is a demand for rental properties as we’ve seen in recent years.”
“However, with so many changes taking place, and with more on the horizon, it’s essential for any landlord to be fully up-to-speed with legislation as the penalties for breaking the law can erode any potential profits.”
If you would like to discuss any of the issues raised with us in more detail or if you have any other property related tax issues, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with a member of our Construction & Real Estate team.
This article originally appeared on the blog of our member firm, MHA MacIntyre Hudson.