By using this website, you agree to our use of cookies to enhance your experience.


Buy-to-let levy on landlords sees £670m boost for the taxman

A quarter of all residential properties acquired in the summer were either a buy-to-let investment or a second home, fresh data from HMRC shows.

Despite the introduction of the 3% stamp surcharge in April, the figures reveal that 56,100 of 235,000 purchases were either an additional home or buy-to-let acquisition.

The introduction of the surcharge earned the taxman an additional £440m in the three month period of July to September. In total, the 86,400 purchases of additional properties since April have earned HMRC an extra £670m from the move, which has taken the total to £1.28bn.


The statistics also reveal that in the three months of April, May and June, 30,300 of 207,900 purchases were for second homes, suggesting that buy-to-let investors had already rushed to beat the 1 April hike, illustrating the growth in popularity of buy-to-let property as an attractive investment at a time of low interest rates and volatile stock markets.

The buy-to-let boom of recent years has fed the stereotype that Brits are obsessed with property. Ever since Margaret Thatcher declared her belief in a ‘property-owning democracy’ and introduced Right to Buy in 1980, the UK was converted into a country that saw houses as something to make money from, not just to live in.

Having long provided mega double-digit returns for investors, investment in buy-to-let has outperformed all major asset classes in recent years, with total annual returns from buy-to-let property hitting 12% in 2015 or £21,988 in absolute terms.

But the government’s decision to introduce a number of measures to curb the growth of buy-to-let landlords, including the addition of a 3% extra charge for buy-to-let and second homes on all stamp duty bands above a £40,000 starting level, which has more than trebled the bill for buying a £275,000 home - hiking it from £3,750 to £12,000 - prompted concern that the buy-to-let windfall may be coming to an end.

However, the latest tax data indicates that despite the extra costs and the EU referendum decision, appetite for buy-to-let remains robust, as investors continue to be drawn to the buy-to-let market as the returns routinely outperform those of other investments. 

Buy-to-let returns continue to beat all other mainstream investments, including commercial property, UK government bonds and cash, while remaining a highly popular alternative to the volatility investors often risk when investing in the stock market. 

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • icon

    So its unlike Chancellor wiill alter this in Autumn statement? Some of these figures will alter as main residence are sold and 2nd home stamp duty is refunded...


Please login to comment

MovePal MovePal MovePal
sign up