Stamp Duty Consultation 2016
During the Stamp Duty Consultation, we take a closer look at the proposed changes and how they will affect homeowners and aspiring buyers.
January 8, 2016
Extra 3% stamp duty – have your say
In the 2015 Autumn Statement, George Osborne announced higher rates of stamp duty on the purchase of additional properties, such as buy-to-lets and second homes. Here at HomeOwners Alliance HQ, we celebrated this policy change being adopted.
Back in 2013, we submitted a report to the Treasury arguing for a new rate of stamp duty for property investors to pay for a cut in stamp duty for homeowners.
Time and time again we see first time buyers directly competing with rich property investors. Clearly it’s an unfair playing field, so we consider this change an opportunity to help rebalance the inequality in the system.
The government is currently consulting on the practicalities of how the 3% stamp duty hike will work, alongside consultation on other changes such as Right To Buy and the London Help To Buy Scheme.
The deadline for the consultation is 1st February 2016 in order for the government to announce the new regime in the upcoming Budget. The new stamp duty regime is due to start in April 2016.
The government claims that the 3% rise in rates will be collected to provide £60 million for communities in England where the impact of second homes is particularly high, and that the tax receipts will help towards doubling the affordable housing budget.
How will this affect homeowners or those aspiring to buy?
The Treasury have indicated that for those buying a second property before selling the first will initially have to pay the higher stamp duty rate.
However, they will also be able to claim back the 3% surcharge, provided that the previous property is sold within 18 months of buying the second home. We have suggested that the 3% surcharge should only become due at the end of the 18 month period.
We believe that one way forward is for the extra stamp duty to only be due after 18 months, if the original home hasn’t been sold. We do not think the tax should be collected upfront, creating a messy refund mechanism for hundreds of homeowners.
In the past, we have suggested that the stamp duty could be paid by the sellers of the property, as opposed to those purchasing. What do you think?
If you would like to get in touch with your thoughts, please email us at firstname.lastname@example.org
Or, if you would like to contact the government directly, please email email@example.com
Deadline for responses is 1st February 2016
We also understand that various landlord groups are coordinating their very robust and negative responses, which we will try to offset as we do think this measure will ultimately favour those who are buying a home to live in.