Chancellor George Osborne’s surprise stamp duty tax hike announced during the Spending Review has been criticised by the buy-to-let sector as an “attack” on small private landlords.
The 3% increase in stamp duty on second homes was the headline measure of Osborne’s five-point housing plan to build 400,000 affordable homes in the next five years, doubling the housing budget to £2bn.
Richard Lambert, chief executive of the National Landlords Association, said the stamp duty rise would “choke off future investment in private properties to rent” after the measure is introduced on 1 April 2016.
Stamp duty on a property costing £250,000 will quadruple from £2,500 to £10,000. Institutionally-backed investors will be exempt from the tax rise.
Phil Nicklin, real estate partner at Deloitte, said the tax was a “further blow” for buy-to-let landlords, who will also be hit by interest restrictions for higher rate taxpayers from 2017.
However, the hike is also expected to disadvantage aspiring homeowners, as stamp duty tends to be configured into house prices.
The British Property Federation hailed the government’s commitment to house-building as a “seminal moment” for the industry, but warned there was a £30bn investment ready to enter the build-to-rent sector which the government “must not lose sight of” in “blind pursuit of building homes for owner-occupation”.
Changes to planning policy will mean brownfield sites in the green belt will be released for starter homes and support regeneration, subject to local consultation.
Melanie Leech, BPF chief executive, praised the “sensible” measure to facilitate building on undeveloped commercial, retail and industrial land, which she said would “put a stop to endless battles in the planning regime” and help the government achieve its target of 200,000 starter homes.
