Stamp Duty Debacle
Why oh why…
Lets examine this stamp duty debacle: In his infinite wisdom, Phillip Hammond and the treasury out up a huge hurdle to second home ownership/BTL market by implementing the 3% surcharge to all properties beyond your primary domicile. Obviously, a political point scorer with generation rent, the idea was to cool the housing market and allow first time buyers more opportunity to purchase while keeping prices from continuously rising. However, with the amount of new homes being built around the country, this two pronged attack appears to actually have come back to bit the government in the back side with not only house prices being kept high (statistically) by these new build houses but the amount of stamp duty collected for the government coffers decreased by a staggering £1 BILLION!! The very definition of stamp duty debacle!
Figures released by the HMRC indicate that although total tax receipts to the Treasury increased by 4.5% to £623 billion, income from SDLT fell to £11.9 billion from £12.9 billion in 2017/18. The fall is undoubtedly due to several factors:
- Transactions in the year to the end of March across England and Wales were 1.1% lower than the year previously
- Sales volumes across London in 2018, the region which contributes the greatest proportion of SDLT, were down 9.5%.
- Since April 2018, the Welsh Government has collected Land Transaction Tax (LTT) as opposed to the treasury receiving income from SDLT. It is estimated the Welsh Government have netted £295 million in LTT, including the higher rate of additional dwelling tax, in the year 2018/19.
So what would be the alternative to this highly iniquitous tax on landlords?
- A complete overhaul of the taxation system for landlords. The housing market needs balance. We need to get away from this fixation of everyone wanting to own their own home – a now 40 year old belief.
- There is a massive need for rental property – not any old run down house but high quality housing fit for the 21st Landlords need incentives not taxes. Higher EPCs should be rewarded and lower EPCs should be penalised for example.
- Build them and rent them! Rather than having exclusive purchase schemes for first time buyers, why not allow landlords exclusive building grants to provide large scale rental properties of a high standard?
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