Stamp duty windfall ‘justifies scrapping buy to let tax changes’
Investors looking to purchase buy-to-let (BTL) property since April of last year, will be aware that an additional 3% surcharge on stamp duty now applies to all BTL property and second homes. When the change was introduced, the government predicted an additional £630 million would be raised in the first year however looking at the figures published by HMRC, this looks to be more lucrative than initially thought.
HMRC have published that within the first nine months the stamp duty surcharge has raised £1.19 billion, £560 million more than they predicted in a full 12 months! If the current rate were to continue it’s likely an additional 1 billion could be raised by the end of the 2016/2017 financial year according to the Residential Landlord Association (RLA). The RLA have also stated that the Office for Budget Responsibility predicts that the surcharge could raise £3.1 billion more than forecast over 4 years.
Considering this, the RLA is now requesting that due to this this additonal revenue, the government should now look at scrapping the plans to reform mortgage interest relief which in turn would discourage landlords to increase rents or leave the buy-to-let market altogether. As per one RLA survey, 58 percent of landlords are considering a reduction on investment of their portfolios and 66 percent believe this will put them under pressure to increase market rents.
We’ll be keeping a close eye on this over the coming months, should you have any queries and would like to speak to a member of our team please call us on 01273 645797
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