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TODAY'S OTHER NEWS

Successive tax increases on residential property are ‘ill-conceived and ineffective’

As the Chancellor prepares for today’s Autumn Budget, more residential taxes are widely mooted to be introduced, according to various experts.

The now former chancellor George Osborne’s decision in 2016 to restrict mortgage interest relief to the basic rate of income tax and add a 3% levy on stamp duty for the purchase of additional homes has unsurprisingly not gone down well with landlords, as reflected by the fact that buy-to-let mortgage approvals have recently plummeted.

Naomi Heaton, CEO of LCP, is among those who thinks that it is regrettable that that the release of the Q3 stamp duty statistics from HMRC have been postponed until after the Budget, as it is likely to paint a grim picture and support calls to remove the additional 3% stamp duty charge on the purchase of second and buy-to-let homes.

Heaton said: “The introduction of successive tax increases on residential property is creating a black hole in the Exchequer tax take. Its aim of stimulating the domestic housing market does not appear to be working, with a fall in transactions of almost 35% over the year.

“Whilst the Exchequer could claim that the introduction of the 3% higher rate for additional dwellings (HRAD) was to reduce the number of second home purchases, the consequence of suppressing this activity is to exacerbate falling revenues, which are down more than 25% over four quarters.

“The government appears to be blindly ignoring the fact that reducing investor appetite for higher value sales, particularly in London’s luxury developments, is not freeing up homes for the domestic market.”

She added: “Hammond may well be tempted to increase property taxes to win ‘the people’s vote’ and to try and plug this black hole. The actual facts, however, are that this is neither certain to increase tax revenues, nor is it likely to stimulate the all-important domestic housing market.

“It is more important than ever to have a well-thought-out strategic approach, rather than a short-term tactical ploy.”

  • John Cart

    You don't expect any common sense to be applied by this shower of S*** government do you. They won't reverse their bad decisions either.

  • G romit

    This economic incompetence just proves this is a faux Tory Government, out of touch with traditional Conservative values.

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    the people being hurt here are not the landlords, it's the tenants, all increases in overheads are always passed onto the end user, what ever the business.

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    Don’t forget this joke of a government doesn’t think landlords are running a business let them spend a week with me and they will realise

     
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    Yes, Steven Oneill! I am a landlord currently running full, back-to-the-brick refurbs on four houses, two of them 50 miles away! I am commuting great distances, doing much of the physical work myself, running various trades too, and sitting up til the small hours most nights running the paperwork and accounts. The spend on this is around £80,000+ over a 3/4 month period in which there is NO downtime - eves, weekends, all consumed by work. But apparently this isn’t a job, can’t be considered a business, and is me parasitically feeding off a ‘desperate’ and ‘exploited’ renter! F-F-S!!!!!!

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    Wouldn’t surprise me if they think the answer is to increase taxes further to plug the hole #clueless

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