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TODAY'S OTHER NEWS

Cameron dismisses industry's concerns over stamp duty and tax changes

Prime Minister David Cameron has dismissed out of hand appeals and comments from Estate Agent Today readers to reconsider the recent measures aimed at making buy to let investment less attractive.

Earlier this month EAT readers had the rare opportunity to have their concerns put to the premier by Andrew Goldthorpe - chief executive of PropertyMutual.co.uk and owner and managing director of PropertyPortal.com - who lives in Witney, where David Cameron is the local MP and holds weekly surgeries for constituents.

After a substantial number of comments were contributed by readers, (here), they were put to the Prime Minister’s office by Goldthorpe; the hope was that they may be the focus of a meeting so the issue could be discussed, even briefly, on an MP-and-constituent basis.

However, this has not happened and instead Goldthorpe received this ‘stock’ response from the Prime Minister through his constituency office staff:

“David has read your email and I spoke to him today.  

"He says “There is a problem that in many places families who can’t afford a home to buy are being squeezed out by people buying a home to let, or as a second property to stand empty for most of the year.

“That is why we have introduced a new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.

“This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities that are being priced out of home ownership.”

“He has also sent your email to the Financial Secretary of The Treasury for his comments on the highlighted part of your email [referring to the official consultation about the proposed stamp duty change] and thank you again for writing.”

Goldthorpe says he made it clear to the Prime Minister’s constituency office “in no uncertain terms” how disappointed he was that this attempt to put the industry’s views was dismissed out of hand.

For any reader not aware of the huge debate within the industry in recent months, the three most controversial measures proposed by the government are:

- an additional stamp duty surcharge of three per cent on all ‘additional properties’ (so chiefly buy to let properties and second homes) priced above £40,000;

- the restriction of mortgage relief for buy to let investors to only the basic rate of income tax, even for investors paying higher rates;

- a change in the Wear and Tear Allowance, permitting landlords to claim only for repairs involving receipts.

To add insult to injury, as many in the industry see it, the official consultation over the proposed stamp duty surcharge was launched on a Bank Holiday in the middle of the Christmas and New Year break, when publicity and industry attention was at its lowest. 

However, readers still have until February 1 to respond to the consultation.

  • Algarve  Investor

    Mr Cameron not answering the question? In the immortal words of Victor Meldrew - I don't believe it!

    Does Cameron ever get a straight answer to a straight question? I'm still yet to witness it if he ever has.

    Algarve  Investor

    *ever give.

     
  • icon

    As I have said countless times, the 3% Stamp Duty rise is really NOT the issue.

    THE issue is tax relief every single other business in the country can claim on their borrowing for their business investments, including large corporate landlords, but has been virtually wiped out for small private landlords by the tax changes hardly anyone seems to mention!

    For the first time in this debate, I see there is a single sentence relating to that matter in this article, but its almost a passing reference, probably not even put to the PM.

    The industry's trade bodies seem to be asleep!

    Jon  Tarrey

    So the crux of it is that smaller landlords are being screwed over while the large corporate landlords are raking it in? Makes sense. The government likes getting into bed with money and big business, they're not so concerned about smaller businesses or investors who won't be hoarding their money in offshore accounts in the Cayman Islands.

    I think the issue is one of perception. Buy-to-let landlords are perceived by the public as greedy so and sos hoovering up all the spare stock and then charging extortionate rent to the tenants they get to live in these properties. Whether this is unfair or not is irrelevant, that is the perception. People also think buy-to-letters have an easy ride of it - the perception being that it's much easier for buy-to-letters to expand their portfolios than it is for first-time buyers to get on the ladder.

    I don't necessarily think that the public at large would have much sympathy with this campaign against Osborne and the extra stamp duty because of how landlords are now perceived. They are seen as the enemy; they are all seen as greedy, land-grabbing, unscrupulous crooks happy to provide sub-standard accommodation for sky-high rents. This perception needs to be challenged and altered if public sympathy is to turn.

    I don't think first-time buyers should fall for Osborne's spin, either. He's had five years to make housing more affordable and it hasn't happened yet. They're good at bringing out gimmicky schemes, to give the impression that they are actively solving the housing crisis, but when it comes to the building of new, genuinely affordable homes they continue to be left wanting. See also Buy to Leave and the nonsense that is Right to Buy for other areas in which the government are failing on housing.

     
    Brit Sixteen Sixty Four

    "THE issue is tax relief every single other business in the country can claim on their borrowing for their business investments,"

    Sorry but Buy to Let is an investment not a business. The case law to state buy to let is an investment is under Rashid v Garcia. Landlords should pay tax and not have unfair tax advantages over first time buyers.

     
  • Jon  Tarrey

    Did anybody really expect any different? If you asked him what year he was born he'd find some way of skirting around the question!

    Cameron and Osborne don't seem to care much for the hand that supposedly feeds them. I'm sure many buy-to-letter voted Conservative at the last election, believing their property interests would be much safer under a Tory government. How wrong they were.

    I can see why they're so angry - buy-to-letters have definitely been deliberately targeted by the government, because the government know public opinion is turning against landlords and investors. People see them as greedy and selfish.

    But Cameron and Osborne are taking a calculated risk. By making a play for first-time buyers - a demographic they've previously shown no interest in whatsoever - they risk alienating a core part of their support. It's a brave move, and one that could turn out to be very foolish.

  • Richard White

    The only thing holding our house of cards economy together is the housing market and young Dave knows it.

    Unfortunately, when they dreamt up this vicious tax grab, they thought everything was peachy and we were still in a economic purple patch. All of a sudden Carney is starting to look pale and rate rises are off the cards for the next year/5 years/10 years/century.

    As it stand at the moment, young Dave is literally going to shoot the Goose that laid the golden egg.

    A word of advice, Dave. If you genuinely want to control house prices, don't deliberately let 4 million extra people in to the country and pretend then it was all accidental. It is the uncontrolled demand that has caused the problem.

  • icon

    “There is a problem that in many places families who can’t afford a home to buy are being squeezed out by people buying a home to let, or as a second property to stand empty for most of the year."

    This proves those writing his replies are completely out of touch with their own rules.

    Every landlord will do everything possible to ensure no BTL property will "stand empty for most of the year." They are trying to provide homes for those who need rented accommodation, and in many cases, as has always been the case and always will be, will never be able to afford to buy. It is therefore essential they operate as a profitable BUSINESS!

    The properties that "stand empty for most of the year" are the investments by the Chinese et al, paid for in cash and not run as a business, and HOLIDAY LETS, which have been PROTECTED in this tax grab. WHY?

  • Gareth   GB

    GOV "He says “There is a problem that in many places families who can’t afford a home to buy are being squeezed out by people buying a home to let, or as a second property to stand empty for most of the year.

    What planet is David Camron living on? Firstly, the reason that most families cannot get a mortgage is because the banks have shut their doors on them. This should have been the first thing that needed to be tackled. Secondly, any person wishing to buy a house that is fortunate to be given a mortgage by the banks can view online or walk into the estate agents and make an offer, prices have not risen that much in the north of England. Sometimes we are judged by prices in the capital and surrounding commuting regions and people have a choice to live were they can afford.

    GOV “That is why we have introduced a new rates of Stamp Duty that will be 3 per cent higher on the purchase of additional properties like buy-to-lets and second homes.
    This Government is taxing the people that has stopped this country falling apart.

    If Governments had built houses as they were supposed to after the 1980s Council Right to Buy scheme, the demand for private rental properties would only be a minimal alternative. However, as they didn’t it has allowed good, honest and mainly caring general public/voters with attitude and tenacity to provide the homes for the communities and sometimes the vulnerable. By doing this it has helped all recent governments get out of the quagmire that was caused by the Right to Buy campaign and the lack of Social housing and council developments infrastructure.

    GOV “This extra stamp duty raises almost a billion pounds by 2021 – and we’ll reinvest some of that money in local communities that are being priced out of home ownership.”

    We have heard this once too often about putting it back into the community and it is falling on deaf ears. You are simply finding more ways to replicate The Old Sheriff of Nottingham by taxing what you can, regardless of the effects. If the Government listened to the professionals in the industry they would appreciate why this is just not going to work for the health of our Country and economy.

    GOV “He has also sent your email to the Financial Secretary of The Treasury for his comments on the highlighted part of your email [referring to the official consultation about the proposed stamp duty change] and thank you again for writing.”

    BLAH, BLAH, BLAH, BLAH, BLAH if they don’t have a consultation to reconsider all changes, then I feel sure the landlords and property professionals will have their day in court.

  • Gareth   GB

    Sorry David, I got your name wrong it should be Camron with the e ( Cameron ).
    Will you apologies if you get this new policy wrong?

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