Today is the last chance for Estate Agent Today readers to have their concerns about proposed stamp duty increases and recent buy to let tax changes put directly to Prime Minister David Cameron.
Andrew Goldthorpe - chief executive of PropertyMutual.co.uk and owner and managing director of PropertyPortal.com - lives in Witney, where David Cameron is the local MP and holds weekly surgeries for constituents to discuss issues.
This coming weekend he is submitting the views of Estate Agent Today readers to David Cameron’s constituency office, ahead of a planned meeting later this month at which he will reinforce the industry’s widespread concern about the measures.
The buy to let sector has been the target for a string of controversial proposals from the government in recent months. Many in the industry have spoken out about the detrimental effects on landlords and lettings agent in particular, but also on estate agents and even new-build developers reliant for some of their business on investor buyers.
They include:
- 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.
Many industry analysts have suggested that these measures combined suggest the government has become deeply unsympathetic to all elements of the buy to let sector, despite its provision of homes for a growing number of households choosing, or obliged, to rent rather than buy.
The most recent controversy is that 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.
The deadline for this consultation closes on February 1 - so Andrew Goldthorpe’s offer to put readers’ views directly to the Prime Minister is timely and urgent.
If you want your view put to David Cameron, please leave a comment beneath this story today and we will collate these. They will then be put collectively to the Prime Minister, and we will report back on the discussion and official response in the near future.
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Dear Mr Goldthorpe,
Can you please put forward the following to Mr Cameron:
Having read the consultation paper, I would like to share the following feedback with you, which I hope will refine the policy to demonstrate better equality among those affected by the changes:
I note that those who own a rental property, but not their main residence, will be liable for the extra tax. There is an exemption for existing buy-to-let owners who own a main residence and at present, this does not extend to landlords who do not own their main residence.
This puts myself and many of my peers at a disadvantage as I own a property which I rent out and I live with my parents. Should I wish to buy a property to live in as my main residence than I end up paying the higher stamp duty land tax charges. This is in stark contrast to somebody who currently has a rental property and a main residence, who then then buys an additional property to live in. In this instance, this party is exempt from the charges.
The forthcoming changes should apply equally to everybody and I believe this exemption from the charges should apply to landlords who do not own their main residence.
Hi Graham, Hi Andrew,
Please can you ask for a justification as to why smaller landlords are being disadvantaged against corporate landlords/institutions?
If the action of being a landlord is to be taxed more harshly, I can get my head around this. I may not like it, but no one likes their tax bill to be increased. What I can not abide is the idea that this policy is targeting small landlords to advantage large businesses.
Hi The main difficulty i have that we are being told that we need more houses, that more people want to rent but we small landlords are making too much money so need to be taxed more heavily then any other business sector who are allowed to offset loans against profits. But what does Cameron think big institutional investors will do, they will not care if someone loses their job, if they can't pay this months rent, that their mother dies and that they are mess and can they pay their rent late.
I own 30 properties and i treat my tenants as human beings, i know all their names and when they call up with queries we have a friendly chat. I employ 10 people plus all the extras who i will also have to get rid of because i will not be making any money.
Cameron you are all about the big boys and keeping the tabloids happy, how about keeping the people that voted you in as business friendly happy. You have let us down badly. I have worked hard for 15 years to build this up, worked 7 days a week, 52 weeks of the year, does that sound like a business owner to you, and i had no money for years but i did it for a future which has been demolished.
We ran a survey in reaction to the autumn statement asking property professionals to give their opinion on housing and the stamp duty rises. The results might be of interest...
http://www.deverellsmith.com/news/property-professionals-think-george-osbornes-financial-plans-negative-impact/
We also asked head of industry from housing, developers and agents to give their opinion on the financial changes and the impact this will have on the property industry http://www.deverellsmith.com/news/impact-of-the-autumn-statement-on-the-uk-property-industry/
I appreciate this may be too late but I would also like to raise the point about the fairness of only applying the exemption from the tax for landlords buying a new home when they are selling their existing one. Rather than a landlord that is currently not living in their own property.
In my case my partner and I both own a property, purchased before we were together. Last year we moved in to my house together and rented out hers. Our plan was to also rent out my house and buy a 3rd property. From April onwards this additional purchase would incur the higher stamp duty rate and therefore we would need to sell my house (as the main residence) first.
However we face the challenge that the area and type of property we want to purchase rarely come to market (usually 2 properties a year) and therefore are snapped up very quickly (usually within a matter of days). With this in mind to stand a chance of getting one we would need to be able to buy very quickly and commit to the purchase. Therefore realaitically we would need to sell my house first and rent on a short term basis. However this would then mean we would have to pay the higher stamp duty despite having sold our main residence.
The only other options would be to create an unnecessary chain and hold up either the sale of my house or purchase of a new property. Or to pay the additional stamp duty and later claim it back (something which we can't afford).
I would like to hear David Cameron's explanation as to how this is fair.
@david Jackson, this is a good post and I would suggest sending this to the Consultation team:
sdltadditionalproperties@hmtreasury.gsi.gov.uk
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