2012 Budget Review for Landlords

Few changes were made to property taxes in Chancellor George Osborne’s 2012 budget, and the majority of buy to let landlords will not be affected.

However some significant changes have been made to the stamp duty rules for homes worth more than £2 million, marking an effort by the Government to stop Stamp Duty avoidance on more expensive properties.

• Buyers of homes worth £2 million or more will pay a new 7% rate of stamp duty – a minimum £140,000 levy.
• Buyers of homes worth £2 million or more will pay 15% where the property is purchased by a company
• Offshore companies selling homes worth £2 million or more will pay capital gains tax on the disposal

These measures will start immediately.

Owners of these expensive homes face a future annual mansion tax which will be discussed in detail later in the year.

Landlords who pay income tax on rents will benefit from an increase in personal allowances, as the threshold increases to £9,205.  The 50p top rate of tax will be cut to 45p from April 2013.

As for the rest of property tax, such as capital gains and inheritance taxes, everything remains the same expect for CGT allowances which will rise in line with inflation.

Property investors holding houses in multiple occupation or buy to lets in a company will benefit from a lower main rate of corporation tax if the profits exceed £1.5 million.