Tax Shock: 1% stamp duty rise was considered for Budget

It’s been revealed that the government did consider a stamp duty RISE which would have been announced in this week’s Budget.

The Daily Telegraph has discovered that a report by the Office for Budget Responsibility - the independent financial department that advises the government - considered increasing the additional homes stamp duty surcharge from three to four per cent.

The increase was not in fact announced and will not be implemented - at least as yet - but page 219 of the OBR report, issued after Chancellor Rishi Sunak sat down, gives the game away.

The report - not corrected before it was released - says on p219: “A three per cent surcharge on additional property purchases was introduced in April 2016. It has been raised to four per cent in this Budget. HMRC has analysed the response to its introduction and found that it was strong.”

However, The Telegraph analysis shows that an accompanying chart in the OBR report suggests it believes buy to let investors would purchase fewer properties and the tax take would, proportionally, be less than might have been expected.

The three per cent surcharge for buy to let and holiday home purchases remained in place throughout the ‘holiday’ from July 2020 to September 2021 during which principal residences enjoyed varying stamp duty exemptions.