Rumours abound that HM Treasury plans to increase stamp duty for buy-to-let landlords in the autumn budget.
The claim comes from an article penned by James Forsyth for The Sun on 4 August, who says that while, “this would raise money for the exchequer and help to keep house prices down,” it will do little to help people buy their first home.”
However, so far this rumour appears quite flimsy. Connect for Intermediaries chief executive Liz Syms says: “Firstly, I haven’t heard any whispers regarding a hike to the buy-to-let stamp duty levy.”
On how it would affect the market if it did go through, she says: “I think it’s an easy political move to increase the exchequers purse, but not one that gives much thought to the wider consequences on the market.
“Buy-to-let has taken a hammering since new tax rules and the levy first came into play. However, for those professional landlords that have stayed in the market it is pretty much business as usual now. Extra costs are factored in and they understand that, as much as the government wants to cool the market, it is in fact vital for those unable to get onto the property ladder.
“Nonetheless, if the levy is increased it could tip the balance for some landlords who, quite rightly, feel they are being badly harassed by the government. When house deposits are so difficult to raise rental properties are always needed. So perhaps, it’s time the housing crisis was tackled from a different angle, rather than penalising one particular sector of the market.”
Keystone Property Finance chief executive David Whittaker adds: “For a long time now landlords have propped up our broken housing market which successive governments have had neither the brains nor the courage to fix. 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.”
Buy to Let Club managing director Ying Tan comments: “Just as we thought the buy to let sector was to be given some respite, we’re now hearing that the treasury may be about to kick it whilst it’s down and fighting to get back up. This will not fix the housing market, and this will not help first-time buyers get on the property ladder.
“This will, however, raise more tax revenue and yes, it’s starting to look like just a tax grab. I have no doubt that the landlord will evolve and adjust as they have done countless times before, but I would be delighted to welcome anyone from the government to our offices in Camberley to give them some insight into how to fix the housing market. Increasing stamp duty further will certainly not be on the agenda.”
Recent figures from HMRC show that stamp duty land tax takings were 13 per cent lower in the 12 months to July as transactions remain flat, which recently led Family Building Society chief executive Mark Bogard to declare the stamp duty land tax “bonanza” as being “over”.