BUYING A HOME FOR YOUR STUDENT?
When children embark on their student life away from home, it’s a :me of mixed emo:ons for parents. Your house will seem bigger and quieter, with fewer teenagers popping and out, but it will stay cleaner for longer and the store cupboard and fridge stocks won’t be depleted so quickly!
INTELLIGENT INVESTMENT? BUYING A HOME FOR YOUR STUDENT
It's the bank of mum and dad that olen pick up the tab for their child's accommodaEon, so instead of paying out hundreds of pounds every month in rent, you might want to think about buying a student flat for your child when they fly the nest and leave for university.
By Elaine Clunie DipPFS, Business Director and Financial Adviser
House prices are likely to fall during 2020 amid growing uncertainty among buyers as worries mount over the effect on incomes and employment from coronavirus. However, to sEmulate the housing sector both the UK Chancellor Rishi Sunak and the ScoAsh Finance Secretary Kate Forbes have announced temporary cuts to Stamp Duty Land Tax (SDLT) and Land & Buildings TransacEon Tax (LBTT). SDLT is payable on residenEal and commercial property purchases in England and Northern Ireland, while LBTT is the ScoAsh equivalent with different rates and rules that apply. SDLT is paid by the purchaser of property and the threshold at which this tax kicks in (for a residenEal property) has been increased from £125,000 to £500,000, a temporary measure to 31 March 2021. This should reduce the average SDLT bill by £4,500 and it's esEmated that 9 out of 10 people buying homes will pay no stamp duty at all. The ScoAsh Government confirmed a similar change to LBTT. The band at which this tax kicks in (for a residenEal property) goes up from £145,000 to £250,000, again a temporary measure to 31 March 2021. It has been esEmated that in Scotland, 8 out of 10 transacEons will fall below £250,000 and therefore will have no LBTT liability at all. These temporary cuts in SDLT and LBTT are available to those buying their own homes and residenEal property investors, both individuals and companies. However, for those buying residenEal property that is not their main home, an AddiEonal Dwelling Supplement is payable, a charge which remains unchanged at 3% in England and 4% in Scotland. These measures are designed to sEmulate the housing market, so if you do have the financial means to invest in a student flat, this could be the Eme to do it. It's true that funding children through university is an expensive business but instead of forking out a small fortune in rental payments when they leave home it’s worth considering becoming a bricks and mortar investor. When the Eme comes to sell the student property, being situated in a student area or university city should mean it maintains a good re-sale value. Elaine Clunie is Business Director and Financial Adviser with Buchan Wealth Management, a Senior Partner Prac:ce of St. James’ Place Wealth Management based at 66 Allardice Street, Stonehaven, Aberdeenshire AB39 2AA, telephone 01569 765359.
Also offices at 10 Broad Street, Peterhead AB42 1BY, tel : 01779 480777 and 3 Queens Gate, Aberdeen AB15 5YL, tel : 01224 202426. Buchan Wealth Management Ltd is an Appointed Representa9ve of and represents only St. James's Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group's wealth management products and services, more details of which are set out on the group's website www.sjp.co.uk/ products. The 9tles 'Partner' and 'Partner Prac9ce' are marke9ng terms used to describe St. James's Place representa9ves. 23
