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TODAY'S OTHER NEWS

Warning - ANOTHER stamp duty threat to buy to let this autumn

A newspaper in warning that the beleaguered buy to let sector may be under attack yet again with the government considering more stamp duty on homes purchased to be let out.

James Forsyth, political editor of the Conservative-supporting Spectator magazine, wrote in a guest column in The Sun over the weekend that this autumn’s Budget may see the introduction of yet more SDLT on buy to let purchases.

In April 2016 a three per cent stamp duty surcharge was introduced on additional homes - that is, both buy to lets and holiday homes.

The Sun is not a natural source of housing news, but it has been used by the government in the past to ‘fly kites’ and raise issues to gauge public opinion before the measures are introduced formally - or, in some cases, abandoned.

In addition, Forsyth is known to have influential sources close to government.

Forsyth’s comments on the issue are:

The Treasury is looking for ways to raise money ahead of the Budget this autumn.

I understand one option being considered is a further increase in the stamp duty rate for buy to let properties.

This would, so the thinking goes, raise money for the Exchequer and help keep house prices down.

But if the Government is serious about helping more people on to the property ladder, as opposed to just raising yet more money from Stamp Duty, then what’s needed is changes to the planning laws to get far more homes built where people want to live.

And here is how the Sun’s news pages reported it in a piece by its political editor, Tom Newton Dunn:

Treasury chiefs are planning to hike the extra levy on buy-to-let purchases in a fresh bid to ease the housing crisis.

The stamp duty premium to curb the purchase of second homes as money makers was established two years ago by then Chancellor George Osborne.

It means buy-to-let purchasers have to pay an additional 3% of the property’s value in tax, on top of stamp duty.

The revelation comes in political writer James Forsyth’s column in The Sun. 

But there have been questions on whether it has been successful in cooling the buy to let market, which is still fuelled by record low interest rates.

Buy to let mortgages now make up less than 13% of all new loans, down from 17% in 2015.

But the number of buy to let landlords in the UK hit an all-time high of 2.5million in the last tax year.

A government source said: “Increasing the buy-to-let levy is something the Treasury are looking at doing in the Budget.

“It will be sold as a measure to ease the housing crisis but it’s more about raising money.”

Stamp duty rises and the buy-to-let premium rises with the value of the property.

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    Great so you really don’t want landlords, fine if I sell up it will release houses back to the market but it will also make several families homeless as they can’t afford to buy a house. Were is the government going to put them.... in hotels so now need to reinvest in hotels mmmm

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    I read last week that the Tax take from SDLT and the additional dwelling supplement is less than was taken under Stamp Duty.

    A typical example of the Laffer Curve in action were an increase in tax rates leads to a reduction in the tax take.

  • James Robinson

    So lets check this rational. By ramping Stamp Duty the chancellor has collapsed transaction levels, so Stamp Duty revenue is falling as is the income tax, VAT, etc on all the other professions involved in the business. To remedy this, the chancellor, is looking to raise Stamp Duty further to raise more revenue? Mmmmm!
    If you are reading this Mr Hammond do please follow this link to the economist Arthur Laffer's explanation of why this wont work:
    https://www.investopedia.com/terms/l/laffercurve.asp

  • icon

    This is about housing reform and taking the heat out of the market, caused by BTL landlord's who have inflated prices over the last decade and this should make the system fairer for those wanting to get on the property ladder. I am all for this move. A small increase in SDLT of 1-2% shouldnt effect the long term profitability of a good BTL investment. if BTL is no longer attractive then find alternative investments but the market wont crash and existing BTL Landlords wont sell just because they are taxing second/third property owners more on new purchases.

  • James Robinson

    Stop panicking everyone, I have been reliably informed via a Westminster insider that James Forsyth wrote this column for Hammond to create a distraction from the growing calls to reduce Stamp Duty. Threaten to increase it and everyone focuses on shouting down the increase rather than the argument to decrease the tax. Oh how easy we are to manipulate.

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    Can believe this!

     
  • Graham Dickaty

    Agreed... a despicable tactic but not beneath today’s politicians, blue, red or yellow

  • icon

    If it goes up it will only come down again
    A couple of months before Election time!!

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