The former secretary of state at the Department of Communities and Local Government, Eric Pickles, is to write to Chancellor George Osborne asking him to exempt ‘granny annexes’ from the controversial stamp duty surcharge.
The three per cent ‘additional homes’ surcharge came into effect last week and significantly increases purchase costs for - amongst other properties - those houses with self-contained apartments within them.
Pickles - a Cabinet member from May 2010 until being sacked after the election in spring 2015 - has told the Daily Telegraph of his concern that the duty will affect up to 33,000 granny flats in England and Wales - although the Treasury says fewer than 1,000 of the flats every year will be hit by the tax change as they come up for sale.
Pickles, who in 2014 presided over the scrapping of council tax on granny flats to encourage more to be built, told the Telegraph that existing owners wishing to sell "could probably get round it by banging great holes in walls and putting in doors".
He says: "Given that there is a ready definition in terms of exemption for council tax, I am going to be writing to the Chancellor suggesting that that they they may care to amend the legislation. I don't think it would cost him very much to do that."
Paul Green, a director at Saga, is also quoted as saying: "Building a granny annexe is a great way of both ensuring that your parents have independence but you also have that social connection and can look after them, so it is good for society, good for families because it frees up family homes and it was right that the Government should encourage that. It is economically illiterate to reverse that policy and it is also morally wrong as well. The government should be supporting families - not trying to keep them apart."
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Oh, I'm sure he'll listen to you, Eric. So very sure.
Osborne seems to have gone off grid in the last few weeks - where's he disappeared to? With the government currently facing intense pressure over the steel crisis and the PM facing even greater heat over his tax affairs, maybe Mr Osborne is lying low so people will forget how quickly his disastrous Budget unravelled.
But I agree, Osborne will be paying no attention to Pickles. He's made his mind up and he won't be forced to climb down until the pressure becomes too much. As the public condemnation won't be anywhere near as strong as that seen for the tax credit and disability cuts, Osborne won't be performing a u-turn anytime soon.
I guess he's hoping his attempts to lure the young vote with gimmicky schemes like Help to Buy, shared ownership and Lifetime ISAs will cancel out the votes he'll lose from the BTL brigade and landlords (people, you would have thought, who would be more inclined to vote Tory). It's a very risky and calculated gamble from Osborne and one that I think will backfire quite spectacularly. Quite why he is biting the hand that feeds him in such a draconian way is a mystery.
Throughout all this, of course, the big question remains - why aren't enough houses being built and what is being done to address the huge supply/demand imbalance?
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