9 August Opposition to rumoured stamp duty increase on buy-to-lets
Political journalists and commentators have recently been suggesting that the Chancellor, Philip Hammond, may introduce increased stamp duty charges on buy-to-let properties in the forthcoming Autumn Budget set for delivery in November this year. Government insiders suggest the possibility is credible and there is some substance to the rumours.
Opposition within the housing market has been growing ever since the rumours began to circulate. The last increase, introduced by George Osborne in April 2016, was 3% and, though no figures have been circulating regarding the rumoured increase, it is expected to add to this surcharge.
Even former conservative cabinet members have voiced their opposition to the plans.
John Redwood, former Trade Secretary, has been quoted in the Telegraph as saying: “There is no need to increase taxes and if you carry on increasing them you collect less money from people, which is the opposite of what you want to achieve. The answer for the Treasury is to cut stamp duty and you’ll raise more money.”
What could be the reason for another increase?
The reason for the proposed hike appears to be part of the wider government policy to attempt to peg back housing prices and make the market more accessible to first time buyers.
Former Social Security Secretary Lord Lilley was also cited in the Telegraph as saying: “The only two ways to get house prices down are to build more houses or to prevent people from buying them by putting taxes on them. They’ve opted for the second one. But we just need to build more houses. We’ve let four million extra people into the country and we haven’t built enough houses for the people that are here.”
The market is expected to suffer if the proposed increase does come into effect.
Property Finance Chief Executive of Keystone, David Whittaker warned: “A further hike in stamp duty aimed at the sector really would be the straw that broke the camel’s back and could result in landlords exiting the market in their droves. This would be disastrous for the country. It might peg house prices back a bit, but it would hurt those in the rented sector more and could lead to an increase in homelessness.”
Walton Estates intend to keep a close eye on the situation as it unfolds and will be producing updates as they emerge.