Shadow housing secretary accusing Sunak of massive ‘Bung’ to Landlords
Labour’s shadow housing secretary, Thangam Debbonaire, has written an open letter to Robert Jenrick accusing the Conservatives of sneaking out a £1.3bn bung to second home owners and landlords in the Summer Economic Update.
This is despite the 3% surcharge still being applied to all second homes and residential rental property.
The letter dated 9 July 2020 says:
“Dear Robert,
I am writing to you after the Chancellor’s financial statement in the Commons yesterday.
Subsequent to the Chancellor’s statement, the Treasury revealed that the stamp duty changes will also provide a tax break for second homeowners.
The Treasury has confirmed that those looking to buy a second property, or buying to let, will only have to pay stamp duty at 3% up to £500,000, rather than the 8% from a quarter a million up.
I’m seeking to clarify why your government is giving such a large tax break to owners of second homes at a time of an acute housing crisis.
If someone bought a second home yesterday for half a million pounds, they would have expected to pay £15,000 more than they would today.
You’ll know that in total, since its introduction in 2016, around 29% of all liable transactions have been subject to the Higher Rate (of Stamp duty) for Additional Dwellings. The majority (88%) of HRAD transactions are on properties sold for under £500,000.
In 2019/20, 34% of homes bought were second properties meaning this policy could cost the Exchequer £1.3 billion. This could fund the immediate gap in local council finances, which the LGA predicts will be £1.2 billion by the end of the year.
At a time when we have an acute local government funding crisis, I question how the Government can justify giving a tax break to people already fortunate enough to own an existing property rather than giving councils the funding they need.
Over a million people are on council waiting lists whilst the number of new social homes has fallen by 80%. This money could be much better spent on truly affordable housing to buy or rent, rather than on a tax break for second homeowners.
The Chancellor had an opportunity to rebuild and invest in truly affordable housing to buy or rent. But he failed to take it. He talked about jobs but did little to address the skills shortage in construction sector.
Please urge the Chancellor reverse his decision to give a tax break to second homeowners. We are calling for clear action in the spirit of constructive engagement.
Yours sincerely,
Thangam Debbonaire, MP for Bristol West”
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Member Since October 2014 - Comments: 423
8:54 PM, 13th July 2020, About 6 years ago
Reply to the comment left by terry sullivan at 13/07/2020 – 11:12To my knowledge, this is not correct. I do sympathise as there are a lot of west european foreigners getting public housing in my area and i have never got anywhere near to it in over 50 years. (I am English born and bred.)
Member Since October 2014 - Comments: 423
8:59 PM, 13th July 2020, About 6 years ago
Reply to the comment left by terry sullivan at 13/07/2020 – 10:50
Indeed it is, as it is not open to everyone.
Member Since February 2016 - Comments: 1056
7:47 AM, 14th July 2020, About 6 years ago
Reply to the comment left by Jay James at 13/07/2020 – 20:54
I think you might have meant East Europeans not West.
Comments: 45
9:41 AM, 14th July 2020, About 6 years ago
Reply to the comment left by terry sullivan at 13/07/2020 – 11:12
careful now!
It’s these tenants that pay many of our rents and save us from voids. Does it matter if they are foreigners if they pay the bills.
Comments: 45
9:45 AM, 14th July 2020, About 6 years ago
I can see a tsunami of anti-BTL taxes and activity in the future, it’s a pool of wealth that has being built up in the country and the government is keen to raise funds in the long run.
Also with so many young people annoyed at renting and older Tory voters dying off in their droves this is an easy way for the government to appeal to voters.
I fear we have hit peak support for landlords and peak prices in many markets and a lull in activity and rise in voids for student properties in particular is only a few months away.
I’m going to significantly shrink my portfolio this Autumn, and move my capital to the stock markets, far more upside and less tax/tenant worries.
Member Since February 2016 - Comments: 977 - Articles: 1
9:57 AM, 14th July 2020, About 6 years ago
Reply to the comment left by Jay James at 13/07/2020 – 20:54
This is not the case in Surrey, however of course some of social housing go to Eastern Europeans, who – NB – are leaving en masse ahead of Brexit. We have had a lot of foreign tenants, from all over the world and they always paid on time, took great care of the property too. Now not that many of them, as they are not coming and will not be. I think it is a prejudice against foreign tenants.
Member Since September 2018 - Comments: 3517 - Articles: 5
10:37 AM, 14th July 2020, About 6 years ago
I’ve got Polish tenants and they are fabulous. Hard workers, motivated and a credit to the country. On the other side I have works shy, weed smoking layabout 30 year old’s claiming everything off the state and will inevitably do so for ever. Rent top ups even paid my their mothers! Know who I prefer!
Member Since February 2016 - Comments: 977 - Articles: 1
11:07 AM, 14th July 2020, About 6 years ago
Reply to the comment left by WP at 14/07/2020 – 10:37
We have had many Polish tenants. The families kept the properties spotless. Pay rent on time. Work sometimes 3 shifts. Lots of them moved now to Germany and Austria, Brexit will remove even more of them from rental properties. Seems that Turks will be coming soon (FTA). No idea how they behave as tenants, but the ones I know are hardworking too (bank professionals).
Member Since December 2015 - Comments: 828
12:00 PM, 14th July 2020, About 6 years ago
i had polish tenant–a crook
had to evict him–when i chased him for back rent he developed whiplash and went on benefits!
Member Since December 2015 - Comments: 828
12:02 PM, 14th July 2020, About 6 years ago
Reply to the comment left by Whiteskifreak Surrey at 14/07/2020 – 11:07
how do turks get into UK—not in eu