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Pressure now on Sunak to raise stamp duty on buy to lets - claim

A leading property law expert says there is now pressure on Chancellor Rishi Sunak to raise stamp duty on buy to lets and holiday homes.

The claim comes from Sean Randall, a partner at Blick Rothenberg, who has responded to the shock short-notice rise in Wales’ Land and Transaction Tax (its equivalent of stamp duty) two days before Christmas. 

The changes are a one per cent increase in the surcharge for purchases of so-called additional dwellings by individuals and purchases of dwellings by companies - this surcharge goes from three per cent to four per cent. 

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The surcharge in England and Northern Ireland is three per cent and in Scotland it is already four per cent.

The Welsh Government says the extra revenue produced by the higher surcharge, estimated at £13m a year, will be invested in social housing.

Randall says: “The measures are a proportionate response to the effect of the pandemic in Wales. Pressure will now be on the UK government to pass similar measures.”

At the same time as Wales announced its hike to the additional homes duty surcharge, the country’s housing minister - Rebecca Evans - revealed that the Welsh Government would not extend the current Land Transaction Tax temporary holiday.

This holiday mirrored the stamp duty holiday underway in England, where homes priced £500,000 or below have no duty payable if purchases are completed by March 31 next year.

Evans says: “We were clear this was a temporary measure to support the housing market in an unprecedented time. A return to the rates and bands which existed prior to 27 July will mean, again, Wales will be the only country in the UK with a starting threshold which is higher than the average price of a home. 

“This means the majority of homebuyers will still not be liable for Land Transaction Tax and maintains this government’s progressive approach to taxation.”

  • girish mehta

    Pointless building social housing and then sold at discounted prices and taxpayer then taking a hit twice once suing higher taxes then subsidising loses by council when they end up selling these houses at a loss. 13 million does not buy you many houses
    Another pointless pointless exercise for votes to keep these clueless politicians in power. Whilst private landlords are facing increase pressure to house these social tenets and make it difficult for them to make decent returns on their investments. Long term these policies will do nothing to ease housing issues and short term policies like this have done nothing to address these issues for last few decades. Housing will be political issue for votes like the NHS , Education.

    David Gibbs

    100 % agreed.

     
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    • S S
    • 30 December 2020 11:11 AM

    Social housing needs to be built and kept. There will always be a demand for it and as the last 20 years has shown selling it at discounted rates doesn't benefit the taxpayer in the long run. There is nothing wrong with social housing and building and keeping it rather than selling it off cheap is the sustainable future strategy for housing in the UK. It is better for all including the PRS if everyone has pride in their housing whether they be homeowners or tenants. For the PRS, long term tenants who love their their homes are the best tenants.

  • Matthew Payne

    This is tinkering at the extreme edges. Since 1997 the population has grown by 14% whilst social housing numbers have dropped by 7%. No surprise that we have a 1.2m SH waiting list which is growing quickly with councils putting many of these people in B&Bs. 2021 will see the first wave of pandemic evictions as well for rent arrears, whether section 21 or 8. A huge number of those will join the queue unable to return to the PRS.

    I wouldnt be surprised to see a big tax incentive for private landlords to take SH tenants. HMG doesn't have any other plan for next year or the 5 after it.

  • Bryan Shields

    The PRS, was never a model to take on the social housing sector.
    Two completely different beasts.
    It's a square that can never be circled.

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