Big investors still face stamp duty hike
Big investors in property will not escape the looming stamp duty hike on buy-to-let homes , the Government has said.
As previously announced, the Government plans to press ahead with plans for a three percentage point stamp duty hike on current rates for buy-to-let investors and second home purchasers, from April 1.
The new rates will apply to purchases of additional residential properties in England, Wales and Northern Ireland.
The plans have been subject to a consultation, which considered whether it may be appropriate to have an exemption for investors buying at least 15 residential properties.
But the Budget document said: "T here will be no exemption from the higher rates for significant investors, and the higher rates will apply equally to purchases by individuals and corporate investors."
The Government did say, however, that it will give people buying a second property a longer period than previously proposed to claim a refund for the higher rate, to help those moving in difficult circumstances.
It has decided that purchasers will have 36 months rather than the originally proposed 18 months to claim a refund, in the event that there is a period of overlap or a gap in ownership of a main residence.
The Government will provide £60 million of the additional receipts from the higher rates to help community-led housing developments in rural and coastal communities where the impact of second homes is particularly acute.
Lawrence Hall, spokesman for Zoopla Property Group, said that based on current property values, prospective landlords will see an increase in stamp duty from £4,545 to £13,272 on the average property purchase.
He said: " The higher stamp duty on buy-to-let properties will ultimately make rents more expensive which in turn eats into people's ability to save up toward a deposit.
"This policy is misguided as in an attempt to reduce demand by some buyers, it ignores the fact that the private rental sector provides an essential service for millions of adults who are happy to rent, especially in their 20s and 30s. By hitting the rental sector with higher taxes and lower reliefs the Chancellor is making renting more expensive and getting on the ladder even harder for generation rent."
But Sarah Beeny, owner of estate agent Tepilo, said the stamp duty hike will help to slow prices at the entry end of the market, as investors and first-time buyers often compete for the same property types.
She said: " I fully support the rise in stamp duty on investment properties."
The Budget will also invest £100 million towards low cost accommodation for rough sleepers leaving hostel accommodation and domestic abuse victims and their families moving on from refuges.