Previously multiple residential units purchased together attracted stamp duty based on the gross value of the transaction. This led to it being paid at the maximum rate in a lot of cases and certainly at a higher rate than if units were purchased separately. Naturally this had a negative impact on professional and institutional landlords.What Did Osborne Change?
The new system will mean the stamp duty is calculated based on the mean value of the units in the transaction (subject to a minimum of 1%) instead of the aggregate which leads to a significant improvement for many larger landlords looking to grow their portfolios. The government is no doubt motivated by the huge increases in demand for rental property (many of you are experiencing improved profit as a result of this demand) and the resultant supply shortages.
There are still some doubts as to the overall implications and whether geographic location and spread of properties will be included in the new law. The broader the scope of the change the more likely it is to encourage further, and badly needed investment in the sector.
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