The chancellor Rishi Sunak is expected to announce tomorrow changes to the levels of stamp duty paid on properties in England, but what does this mean for buy-to-let landlords?
The announcement is expected to remove stamp duty on properties up to a value of £500,000 for between six months to one year. First-time buyers already enjoy stamp duty relief and do not need to pay stamp duty on their first property purchase up to £300,000 (£500,000 in London).
The proposals to exempt most homebuyers from paying any stamp duty are designed to kick-start Britain’s economic recovery but there is currently a lack of clarity on what this means for property investors.
The government would almost certainly stimulate housing market activity post-lockdown if it abolishes the 3% stamp duty surcharge for buy-to-let landlords buying additional properties.
Any significant saving on stamp duty would encourage buy-to-let investors to return to the rental market and this in turn would help meet the rising demand for rental homes and drive transaction levels.
Franz Doerr, founder and CEO of flatfair, said: “There cannot be a healthy rental market without a healthy housing market. The government's plan to institute a stamp duty holiday is welcome, but there needs to be more clarity on the terms of any deal.
“Cuts to rates cannot wait until the autumn, as the entire market will be paralysed by prospective buyers waiting for their discount.
“The industry also needs clarity on what this will mean for buy-to-let landlords. Thousands of landlords have left the sector in recent years, and support to help increase the number of homes available for rent is sorely needed.
“With thousands of Britons actively choosing a rental lifestyle that better fits their needs, the government needs to realise that homeownership at all costs is no longer sustainable, and think about how to support both renters and future homeowners on Wednesday.”