A Freehold Investment unaffected by Stamp Duty

Last weeks budget was a disappointment to most property investors when then Chancellor announced that he would raise the Stamp Duty exemption by just £5,000 to £125,000.

This unpopular tax can dramatically eat into gains made through freehold housing investment. Purchasing a "buy to let" house for £300,000 (by no means unusual in the Home Counties) means that your investment is immediately £9,000 (3%) in the red - not the best start for your new property investment. Add to this the albatross of a large mortgage, demanding tenants and "vacant" periods and you can appreciate why "buy to let" investments have lost some of their appeal with the general public.

Investing in property via freehold land rather than housing by passes these problems. Most land is sold for well under £125,000 and so there is not Stamp Duty to pay to Gordon Brown. There are no mortgage payments at 6% interest and no tenants to inform you of a blown light bulb at 11 o'clock at night.

Investing in Land

Add to this the fact that that land ownership potentially includes Inheritance Tax and Capital Gains Tax relief and you can see why investors in the know consider a piece of land an essential part of a rounded investment portfolio.

Note - Please contact an Independent Financial Adviser should you have any tax queries.

Apr 06

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