Contractor Buy To Let
The Chancellor hit Contractor Buy to Let properties in the Autumn Statement.
Contractors got off lightly in the Autumn Statement.
Chancellor Osborne didn’t carry out most of the threats he made, beforehand, or he at least watered them down.
However, contractors who have invested their money in property have not fared so well. The Chancellor is going to hit them next year.
Buy To Let Purchases
Buy to Let purchases went up by 36.4% in September compared to August.
That’s despite the withdrawal of interest mortgage relief by the Chancellor.
Costs will go up a lot from April next year which is when the levy gets rolled out.
Let to Buy Stamp Duty Rises
The cost of stamp duty for a Buy To Let of £250,000 will go up from £2,500 to £10,000.
That’s four times what it was before and a hefty increase.
So, how much of a problem is this for Buy To Let contractors?
Freelancers have traditionally invested in the stock market and property to try to use their contractor earned money to try to make more money.
This is unlikely to change.
Mortgage Interest Relief
However, smart contractors will be making their Buy To Let purchases ahead of next April when the change comes in.
This will save them thousands of pounds in stamp duty.
As regards Mortgage Interest Relief, here is how does the change will impact on contractors.
At the moment, contractors only pay tax on their rental income after deducting their monthly interest payments and some allowable expenses.
Tax will then paid on the profit at the contractor’s highest marginal rate of income tax.
So, it looks like UK contractors, who are heavy investors in property, will be stampeding to buy new properties, using Buy to Let before next April.
The sooner they start the better as everyone know how long it can be from staring a property search to actually completing a deal.
There won’t be a better time for Contractor Buy to Let opportunities.
Specialist Contractor Mortgage Brokers
Contractors are much better using specialist contractor mortgage brokers when buying a property. They can get contractors better rates.
They can get them offers using their daily rate annualised rather than their Director’s salary which a hight street bank or building society would do.
Offers are all on production of your contract instead of the three years worth of accounts that the banks and building societies would ask for.
To find out more info from the specialist contractor mortgage broker, or to apply, just click on Contractor Mortgage Application and fill in the form there.