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Is Now the Time to Expand Your Property Investment Portfolio?

If you’re a landlord and you’re thinking about expanding your property portfolio, there are several good reasons to act now rather than waiting.

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With the cost of borrowing at a historical low, many landlords have been remortgaging to enlarge potential war chests with an eye on future bargains. The proportion of landlords increasing the size of their loans has risen significantly to 46% from a long-term average of 38%.

Rishi Sunak’s stamp duty holiday also provides a good reason to act now, particularly if you’re buying investment property rather than a home that you intend to live in.

Stamp duty on buy to let property

Since 2016, landlords have paid a surcharge of three percentage points in stamp duty on each band when they purchase a buy to let property or a second home. This can potentially add thousands to your stamp duty bill.

The surcharge applies to anyone who is buying a second property, including those who are buying a main home where their existing home has not yet been sold. In this case, you could apply for a refund if your previous home is sold within 3 years.

The Stamp Duty Holiday temporarily expands the 0%/3% band from up to £125,000 to up to £500,000.

Previous Rates Holiday Rates
Tax band Own Home BTL/Second Home Tax Band Own Home BTL/Second Home
£0-£125,000 0% 3% £0-£500,000 0% 3%
£125,001 - £250,000 2% 5% £500,001 - £925,000 5% 8%
£250,001 - £925,000 5% 8% £925,001 - £1.5 million 10% 13%
£925,001 – £1.5 million 10% 13% £1.5 million + 12% 15%
£1.5 million + 12% 15%      

How much could you save on a second property?

Prior to the changes, if you were buying a second property worth £499,000, you would have paid £29,920 in Stamp Duty. Until March 31st 2021, you will instead pay £14,970, saving you just under £15,000.

Property price Previous stamp duty cost New stamp duty cost Saving
£200,000 £7,500 £6,000 £1,500
£300,000 £14,000 £9,000 £5,000
£400,000 £22,000 £12,000 £10,000
£500,000 £30,000 £15,000 £15,000

We work closely with specialist mortgage broker CMME, who can provide advice on buying additional properties, either personally or through a limited company.

If you have any questions or if we can help in any way please call our expert team on 01296 468 483 or email info@orangegenie.com.

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