Consultation on buy-to-let stamp duty increases reveals only ‘largescale’ investors will benefit from exemptions
The period between Christmas and New Year might not seem like the best time to issue a consultation paper but this is exactly when HM Treasury decided to publish its much-anticipated one on the higher rates of stamp duty for additional properties, announced by the Chancellor in his Autumn Statement. Perhaps of most interest to landlords are the potential exemptions, particularly those for purchases made within a limited company structure.
In his statement, Osborne suggested an exemption might be applicable for companies that already owned a portfolio of 15 or more residential properties – the objective seemingly being to move the buy-to-let sector more into the corporate space.
In the consultation, this is referred to as “the treatment of largescale investors” and it is clear the Government has no intention of this exemption being available for smaller, private landlords.
The Government is seeking responses on allowing individuals an exemption from the stamp duty increases. However, this would only be for those individuals who already own 15 properties or those who are bulk-purchasing 15 or more properties at one time.
I have to say that 15 seems an arbitrary figure and there is no evidence provided in the paper to back up why it has been chosen.
Most stakeholders would agree that, especially with the impending tax relief changes, the limited company structure is going to gain in popularity and there may well be some justification to allowing those who have a much lower number of properties within such a company to be exempt from the stamp duty increases. This does not appear to be something the Government is likely to countenance, however.
Bob Young is chief executive of Fleet Mortgages