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Scrap Stamp Duty surcharge for a ‘double whammy’ win - call

An industry trade body wants the government to scrap the three per cent stamp duty surcharge on additional homes - and bag itself extra revenue and a solution to the rental shortage to boot.

The National Residential Landlords’ Association says more investors would buy homes to let out if the surcharge - first introduced some six years ago - was ended.

Ben Beadle, NRLA chief executive, says: “The government needs to wake up to a crisis of its own making. Taxing landlords out of the market serves only to cut supply, increase rents and make home ownership more difficult to afford.

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“The evidence clearly shows that the supply of rented housing is declining as demand increases and will continue to do so. The government is taking a blinkered approach to the issue, which is not helped by its reluctance to admit mistakes it has made in the past.

"It makes no sense to tax the supply of new homes supplied by landlords investing in new build or bringing empty homes back into use. As this study indicates, removing the tax will actually generate more revenue, not less.”

The NRLA has instructed economic consultancy Capital Economics to research the issue - and it says removing the three per cent additional homes surcharge would see almost 900,000 new private rented homes made available across the UK over the next decade.

Due to increases in income and corporation tax receipts, the modelling suggests this would lead to a £10 billion boost to Treasury revenue over the same period.  

Also, Capital Economics notes that these revenue streams would continue over the decades that follow, so long as the landlords do not later sell all these properties. It has warned that, if owner occupation and social housing continue at their 10-year average rate of growth, this would require a significant increase in the supply of private rented homes. 

 

Almost 230,000 new homes would be needed in the sector each year if government ambitions for housing over the next decade are to be met.

The association says that even if other housing tenures double their rate of growth, it would still mean over 100,000 new private rental homes a year will be needed over the same period.  

Capital Economics suggests that without changes in tax or other policies, the private rented sector stock will decrease further by over half a million properties over the next decade.

 

  • Andrew Stanton PROPTECH-PR A Consultancy for Proptech Founders

    The extra SDLT of 3% needs to be removed, as any extra cost, only translates into a higher cost for the tenant, who sits at the hard edge. When will the government understand that landlords are providing a service, a home for tenants, and the PRS needs more not less encouragement.

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    Landlords are always the easy target, we have suffered over the last 12 years but the housing crisis has only got worse, the moves have always been to gain political favour as opposed to actually solving the crisis..

  • Mark Walmsley

    Complete sense which is overlooked by those that can make it happen, so far…

  • Trevor Cooper

    People who can afford to buy additional properties should not complain at having to pay additional stamp duty. Many first-time buyers are outpriced by them in the market and a long-term investment in property is a tangible investment that cannot disappear overnight, provides a regular return on the investment and capital appreciation.

  • Matthew Payne

    Complaining perhaps, but more importantly voting with their feet with all the increased taxation, its not just SDLT, but S24, compliance etc, which is a cost being carried by tenants in the supply chain. The PRS has been shrinking since 2016, by about 275,000 units so far, coincidentally since government started their tax hikes, and set against a background of 15 years where the population has been increasing 3x faster than we have been building, means this trend needs to be kicked into reverse pretty sharpish. The UK needs 2m more homes overnight to get us back on terms, let alone seeing its largest private supplier of them selling up.

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