22:26 PM, 30th December 2015, About 6 years ago 13
I wish to make the following comments on the consultation on ‘Higher rates of Stamp Duty Land Tax (SDLT) on purchases of additional residential properties’.
My first point is a general one. The Government says that it is committed to accelerating housing supply and wants to see more homes built. This policy on higher rates of SDLT will, like the Government’s policy on restricting finance cost relief for individual landlords, be a disincentive to investment in housing and will have a negative impact on housing supply.
In relation to question 2, I do not agree that the Government’s proposal for joint purchases is appropriate. In particular, where a parent is helping a child get on the housing ladder by purchasing jointly, I believe such transactions should be exempt from the higher rates of SDLT. Such transactions assist first time buyers and should be encouraged, not discouraged.
In relation to question 11, I do not agree with the Government’s proposed treatment of furnished holiday lets as these type of properties make an important contribution to local economies. My proposal is that the sale of an existing furnished holiday to a purchaser who continues to use the property as a furnished holiday let should not attract the higher rates of SDLT. My reasoning for this is because the transaction does not reduce the supply of owner occupied houses.
In relation to question 12, I have a number of proposals for the Government to consider.
My overall impression of the consultation published by the Government is that it seeks to favour large scale investors over small scale investors. I believe that the Government’s overall aim of accelerating housing supply would be better achieved if it also incentivised small scale investors to invest in housing. The cumulative contribution from small scale property businesses to housing supply should be acknowledged by the Government and encouraged.
In relation to question 13, I believe that an exemption should be available to individual investors with an existing residential property portfolio of at least 15 properties at the time of a transaction. This would recognise the contribution that such individual investors make as housing providers to the thousands of people who choose to, or must, rent privately. Non-natural persons with at least 15 properties at the time of a transaction should also be exempt as should the bulk purchase of at least 15 residential properties. These exemptions will help accelerate housing supply.
In general, there is a need for greater consistency in the Government’s approach to housing providers with regard to SDLT and other taxes. For example, if property companies with 15 or more properties can fully offset their finance costs against their profit, why can this also not apply to individual landlords with 15 or more properties?
To conclude, I believe that there is a risk that the Government’s proposals will reduce investment in housing and will result in a stagnated housing market. The proposals I have put forward are aimed at avoiding such stagnation and accelerating housing supply.
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