Buy-to-let landlords could face another stamp duty rate hike in the Autumn Budget to further curb the acquisition of second homes.
The claim that the Treasury is looking for fresh ways to raise money ahead of the Budget this autumn came in political writer James Forsyth’s latest column in The Sun.
‘This [increased stamp duty surcharge] would, so the thinking goes, raise money for the Exchequer and help keep house prices down,’ he wrote.
There has been an increase in the number of buy-to-let landlords selling up and quitting the private rented sector over the past couple of years, with tax and regulation changes cited as the main reasons why landlords are offloading properties.
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 mortgages now make up less than 13% of all new loans, down from 17% in 2015.
A report published a couple of months ago by the RLA research exchange, PEARL, warned that the country faces a net loss of 133,000 homes for private rent over the next year.
This follows government figures showing that between March 2016 and March 2017 England saw a loss of 46,000 private rented homes.
The proposed buy-to-let tax hike is likely to be opposed by some Tory backbenchers over fears the move would result in lower revenues for the Treasury.
Two former Conservative cabinet ministers have already criticised reported plans for a further hike in the levy charged on buy-to-let purchases.
John Redwood, the former trade secretary, called the potential stamp duty hike a “tax attack” on second home owners.
He said: “There is no need to increase taxes and if you carry on increasing them you'll collect less money from people, which is the opposite of what we want to achieve.”
“The answer for the Treasury is cut stamp duty and you’ll raise more money.”
Lord Lilley, the former social security secretary, told The Telegraph that he believes the only real way to curb house price growth is to build more houses.
He said: “We just need to build more houses. We’ve let four million extra people into the country and we haven’t built enough houses for the people who are already here.”