Analyst dangles hope that 3% stamp duty surcharge may be deferred

A leading tax expert says there are likely to be unintended consequences of what he calls “half-cocked legislation” bringing in additional taxes on the buy to let sector.

Graham Boar, tax director at UHY Hacker Young, writes on the Accountancy Live website that property landlords appear to be in the Treasury’s cross-hairs, being the subject of a three per cent stamp duty surcharge from this April and a reduced stamp duty payment window being introduced a year later. 

Boar says many elements of the proposal remain hazy at best, and may not be satisfactorily addressed in the relatively short consultation period announced by the government over the Christmas holidays. 

Boar says there are some wider exclusions than just the well-publicised ones of properties costing under £40,000, caravans, mobile homes and houseboats.

He says also excluded are mixed-use properties such as shops with a flat above and mixed-use transactions where residential and non-residential properties are bought in a single transaction.

“Where six or more residential properties are bought in a single transaction, the buyer will be able to choose between opting for multiple dwellings relief (paying residential rates, including the three per cent levy, on all properties at the average price) or paying the non-residential rates based on the total purchase price” he says.

Boar says there are also “hazy” proposals regarding the possible exemption of corporate purchases and bulk-buys of 15 units or more, and whether it is better for a typical individual buy to let investor to incorporate or remain outside a company structure. 

“The levy should have little impact on an investor’s decision between personal or corporate ownership of their property, although the mortgage interest relief might have more impact. Certainly the fact that the levy will apply to incorporations of existing portfolios will make the availability of incorporation relief on such planning more acute, and it will be interesting to see if the SDLT relief for partnerships incorporating their business is preserved during this change” says Boar.

His article ends with a note that has not been struck by other analysts - that while the details will be released on March 16 in the government’s Budget, “it may yet go the way of trust tax simplification and be deferred for another year.”