The recent announcement framed this increase as a tax on “second homes,” though it actually applies to all investment properties, assuming you already own a primary residence. The new rate applies to all property transactions that exchange from now onwards. If you’ve already exchanged contracts, you’re unaffected; if not, you’ll need to account for the extra cost. For a £250,000 property, that’s an additional £5,000.
This change only impacts transactions in England, as property taxes vary in Scotland and Wales. Is this a frustrating move for investors, especially those mid-transaction? Absolutely. With an already tight rental market, this could even be counter-productive. Yet, while this may alter the immediate landscape, it’s unlikely to be a game-changer for investors. Just like past surcharge increases in 2016 and 2021, the market will likely adapt, and investors will factor this into their decisions as part of the overall cost of investing.
