New figures released this morning show that buy to let investors and second home buyers now pay almost half of the entire stamp duty revenue going to HM Revenue & Customs each year.
The HomeOwners Alliance - which is in favour of stamp duty surcharges for investors and holiday properties - says the additional homes surcharge of three per cent on the total purchase price now provides 46 per cent of the government’s total stamp duty receipts.
Commenting on the findings that investors - not homebuyers - make up nearly half of all receipts, HOA chief executive Paula Higgins says: “We campaigned for the surcharge and continue to agree with the government that those buying a home to live in should be treated differently to those looking to make money out of property or buying a second home.”
But the HOA is calling for a review of stamp duty as it applies to first time buyers.
It claims that one in four first time buyers are now having to pay stamp duty, despite the government's first time buyer exemption. This is because of fast-rising capital values pushing properties into the stamp duty zone, even for first timers.
The association says that for owner occupier purchasers, one in four properties liable for stamp duty are now in bands above £500,000; up from one in six just two years ago.
Higgins adds: “It’s clear that the stamp duty tax needs to be reviewed to ensure it’s facilitating rather than fettering first time buyers.
“Against a backdrop of soaring house prices, cost of living crisis and increased tax burden, first time buyers of a home worth £400,000 are being hit with stamp duty bills of £5,000.”
“Alongside announcing new initiatives to increase homeownership, the government needs to increase the existing first time buyer relief threshold. The relief was introduced in 2017 to reduce the upfront costs for first time buyers. Fast forward five years and there is a real risk first time buyers become a taxation cash cow, which can’t be right.”
The HomeOwners Alliance wants the government to scrap stamp duty entirely for owner occupiers, but in the absence of such a radical move it demands a series of lesser measures.
These include raising the exemption threshold and stamp duty bands by £100,000 to make account of house price growth, and raising the first time buyer relief from £300,000 to £350,000 as a minimum.
It also wants the government to commit to raising thresholds annually in line with house prices - a move which the HOA claims will reduce stamp duty costs for those downsizing and those buying an averagely priced home
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