19:22 PM, 4th April 2011, About 12 years ago 2
Landlords selling buy to let property could be hit by a new tax if the government takes up a proposal from a leading bank aimed at making buying a home cheaper.
HSBC wants the government to reverse stamp duty laws and make the tax payable by sellers rather than buyers.
This could cut the purchase price of an average home by at least £1,250 – while putting up the cost on a sale by the same amount.
The reform call follows a study that found 85% of non home-owning young adults under 35 years old want to own a home, but only 16% expect to do so within the next five years.
While almost half (45%) of aspiring home buyers never expect to buy a home.
Stuart Beattie, HSBC’s head of mortgages, said: “Our study proves that the aspiration to be a home owner continues to be exceptionally strong. Over 80% of young non-home owners are aspiring to buy a home but are being prevented from doing so due to lack of affordable homes.
“The key to helping buyers back into the market is to help them obtain the cash deposit that responsible lenders require before granting a mortgage.
“ To this end, both government and private sector interested parties need to come up with innovative schemes to help aspiring home buyers.”
It’s hard to see how the HSBC proposal would affect current first time buyers as they pay zero stamp duty on buying a home valued up to £250,000 until March 24, 2012.
Meanwhile, landlords and other homeowners would bear the brunt of the proposed tax.
With the average home valued at around £165,000 according to most house price surveys, stamp duty would be charged at 1% or £1,650 on a sale on top of any capital gains tax due.
The bank also suggests 95% mortgage lending could come back if insurance cover like the old mortgage indemnity guarantee (MIG) policy was reintroduced.
Under MIG, the buyer paid a one-off policy premium to indemnify a lender from losing money on repossession based on the value of any loan above a set loan-to-value, often 75% of the property purchase price.