A letter from the Financial Secretary to the Treasury appears to suggest that the government is set on implementing the three per cent stamp duty surcharge on April 1 irrespective of the consultation exercise still continuing.
The letter came about after comments about the surcharge and other recent government proposals from Estate Agent Today and Letting Agent Today readers. The comments were passed to the office of Prime Minister David Cameron by Andrew Goldthorpe - chief executive of PropertyMutual.co.uk and owner and managing director of PropertyPortal.com - who lives in the PM’s Witney constituency.
The PM’s office in turn passed the comments and a covering email from Goldthorpe to David Gauke MP, Financial Secretary to the Treasury.
The text of Gauke’s reply is reproduced below but a key sentence - contained in paragraph five - appears to suggest the government is already wedded to the April 1 introduction of the surcharge, irrespective of the results of a formal consultation process now underway.
Goldthorpe had raised the unusual timing of the start of the consultation, and its shorter-than-usual duration which appears to fall short of the government’s own guidelines.
Gauke’s fifth paragraph in full reads (with the key sentence in bold): “In his email, your constituent expresses his concern that the consultation period is too short and that the consultation document was published over the Christmas break. I would like to reassure your constituent that the consultation process is full and open and that his and other respondents’ views will be taken into account. The consultation period is shorter than 12 weeks so that my officials have time to properly analyse the responses we receive so the final policy design can be confirmed and come into force by 1 April.”
The final sentence of this paragraph, in bold, has led Andrew Goldthorpe to comment: “In other words, it appears to me that the government never had any intention of allowing the consultation to meet their own recommendations, and intended to disregard objections as this legislation was always going to be pushed through by 1st April.”
Here is the complete letter from David Gauke to David Cameron:
“Dear Prime Minister
“Thank you for your letter of 20 January enclosing correspondence from your constituent Mr Andrew Goldthorpe ... about the changes to Stamp Duty Land Tax (SDLT) announced at the Spending Review and Autumn Statement 2015.
“From 1 April 2016 higher rates of SDLT will be charged on purchases of additional residential properties, such as second homes and buy to let properties. The higher rates will be three percentage points about the current SDLT rates. This is part of the government’s commitment to supporting home ownership and first time buyers.
“It is right that people should be free to purchase a second home or invest in a buy to let property. However, the government is aware that this can impact on other people’s ability to get on to the property ladder. This policy is not expected to have an effect on rent levels and it is worth noting that SDLT is only paid once, when a property is purchased.
“The government does not intend for higher rates of SDLT to apply to those making significant investments in residential property given the role of this investment in supporting the government’s housing agenda. The government is currently consulting on whether an exemption for purchasers making significant investments in residential property is justified in some circumstances and how it can best be formulated.
“In his email, your constituent expresses his concern that the consultation period is too short and that the consultation document was published over the Christmas break. I would like to reassure your constituent that the consultation process is full and open and that his and other respondents’ views will be taken into account. The consultation period is shorter than 12 weeks so that my officials have time to properly analyse the responses we receive so the final policy design can be confirmed and come into force by 1 April.
“The consultation is currently open and available online and I would welcome any further views your constituent has as part of this. Responses may be sent to: email@example.com.
“Please pass on my thanks to Mr Goldthorpe for taking the trouble to make us aware of these concerns. I hope this reply has been helpful.
“Yours ever, David Gauke.”