12th
Jul 2020
The Tories' mini budget that was unveiled yesterday (8th July) has announced a ‘holiday’ Stamp Duty Tax cut.
pixabay.com
This will offer a huge tax break to those buying second homes and of course to BTL landlords.
The Chancellor Rishi Sunak has considerably reduced the property sales tax by moving the threshold, when it comes into force, from £125,000 to £500,000.
The Chancellor said the Stamp Duty Tax ‘cut’ runs until March 31st 2021 is estimated to save homebuyers around £3.8bn, and will help nearly 90% of house buyers providing a massive boost to the housing market.
The average buyer should make savings of around £4,500 and those buying homes over £500,000 can save up to £15,000.
Experts say that the people who will receive the most benefit will be those who are buying more expensive houses and the majority will occur in the capital and the South East.
As the cut includes all residential properties’ sales, landlords and people looking to buy second + homes will all benefit from the new threshold.
In a piece for the Mirror, Labour's Shadow Chief Secretary to the Treasury Bridget Phillipson wrote: "It could have been directed at families looking to get on the housing ladder or up-size.
"But because what the chancellor announced was so broad, huge chunks of the money will go to landlords and second home owners in the south east and London.
"At a time of crisis, should this really be the focus?"
The ‘Usual Suspect’, Lib Dem leadership candidate Layla Moran chipped in by saying: "The Chancellor has slashed taxes for landlords while failing to support renters.
“This adds insult to injury for the many people struggling to pay their rent each month and facing the threat of eviction in August.
“There should be a guarantee that any Stamp Duty saved on buy-to-let properties is passed on to tenants through reduced rent."
The new £500,000 threshold before the stamp duty starts to be charged, applies to all residential properties across England and owners of residential properties will now get the same cash discount when purchasing additional houses as first time buyers, or those moving up the property ladder.
BTL landlords and second home buyers will still have to pay the 3% Stamp Duty surcharge on the sale price of the property.
The Resolution Foundation also slammed the Stamp Duty cut because the people in the "higher house price" regions of the UK will benefit the most.
The think tank said: "Someone buying the average home in the North East will see no gain, while a buyer of an average home in London will save over £14,000.
"The average first-time buyer already pays no stamp duty in all regions and nations except London, and therefore won’t benefit."
In an interview with BBC Radio 4’s Today programme Chancellor Rishi Sunak, acknowledged that his schemes were far from perfect, however he has only had a very limited timescale, due to Covid -19’s rapid crippling effect on the economy, to draw them up.
He told BBC Radio 4's Today programme: "Throughout this crisis I've had decisions to make and whether to act in a broad way at scale and at speed or to act in a more targeted and nuanced way.
"In an ideal world, you're absolutely right, you would minimise that dead weight and do everything in incredibly targeted fashion.
"The problem is the severity of what was happening to our economy, the scale of what was happening, and indeed the speed that it was happening at demanded a different response."
Richard Merrick of PIMS, said: “We certainly understand the feelings of those that this tax break is helping those with ‘more’.
“However not one person or organisation has said that due to the daily increase in numbers of redundancies, the private rented sector is far more important now as social housing cannot cope with the increased waiting lists.
The private rented sector provides homes for people who are suffering loss of earnings, and for those who cannot or will not get mortgages.”
News Archive »