Changes to Buy to Let Purchases06 May 2016
Yesterday Scottish finance minister John Swinney introduced a three per cent surcharge on the full purchase price of all buy to let and holiday homes – from April 1 2016. (On all additional properties over £40,000).
We were probably expecting something along these lines in Scotland bringing us into the same situation as the rest of the UK. This surcharge is in addition to the Land and Buildings Transaction tax introduced earlier in 2015. Not the best news for Landlords who have already been hit with additional tax changes to wear and tear allowances and mortgage interest tax relief.
We may see this new tax get absorbed in lower purchase prices from would be buy to let Landlords; certainly even more care will be needed when making a purchase to make sure it is the best buy possible.
Rents may also go up; Most predictions within the market would agree that rents are set to rise as as more investors may think twice about entering the market, supply will further be strained and the normal supply and demand economics will come into place.
Fineholm know that the rental market is a necessity in Scotland in order to meet housing demands and with sensible purchases, in strong markets, and with adjustments in approaching the buy to let investment market, property in Scotland will still provide a very good long term investment with good solid returns.