In the run up to this month’s changes in stamp duty, property lawyers at James Legal were working overtime to complete property purchases before the deadline, and were able to save clients over £150,000 in extra stamp duty.
Property investors will be hit hard by the new three percent stamp duty surcharge when investing in residential properties and buying second homes. This significant tax hike will certainly put some investors off.
Many investors affected by the tax hike on residential property however are now turning their interests to commercial property as an alternative investment, due to a reduction in rates of stamp duty payable on commercial/mixed use properties from March.
Kelly Bannister, Head of Property at James Legal said:
When the treasury announced the changes, clients were understandably very concerned about the impact this would have on their investments.
Commercial property investment can offer a good alternative. Not only do the new three percent Stamp Duty surcharges not apply to mixed use/commercial properties, but most people buying mixed use/commercial properties will pay significantly less stamp duty on those purchases now than they would have done before the changes, due to a reduction in commercial stamp duty rates. Investors will pay £5,000 less in stamp duty on a commercial property purchase for £275,000 now than they would have done before the new rules came in.
It is for this reason the firm says the property market is not all doom and gloom which will hopefully boost morale. Kelly said:
The first impression was that landlords would be put off investing in property altogether, but it may just shift their investments to a different type of property which, in addition, has added benefits such as being able to include in pension plans.”
Our property department has been very busy over the last year and we hope this confidence in the property market will continue. There are some fantastic opportunities in Hull at the moment for both investors and young clients who are looking to get on the property ladder. We believe that the only way is up for this city, as attention turns to us during 2017’s UK City of Culture.
For more information about James Legal, please visit www.jameslegal.co.uk or call 01482 225566.