The Labour Party wants Landlords excluded from the Stamp Duty incentive

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    The Labour Party wants Landlords excluded from the Stamp Duty incentive

    I am submitting an article which appeared in a mortgage trade briefing note which once again shows the lack of understanding of the positive contribution which Private Landlords make in providing rental accommodation.

    " Labour calls for landlords to be excluded from £1.3bn stamp duty cut

    by: Lana Clements


    Second homeowners and landlords should not benefit from the stamp duty holiday announced this week by chancellor Rishi Sunak, according to Labour.

    In an open letter to housing minister Robert Jenrick, the party has said the tax cut is worth £1.3bn to property investors.

    The cash could fund the gap in local councils’ finances, Labour argued.

    In the summer statement this week, Sunak axed stamp duty on homes worth up to £500,000 for all buyers until 31 March 2021.

    Second homebuyers are still subject to the three per cent stamp duty surcharge.

    In 2019/20 more than a third of homes bought were second properties, according to Labour.

    Shadow housing minister Thangam Debbonaire said: “It is unacceptable that the chancellor tried to sneak out this huge bung to second homeowners and landlords while millions of people are desperate for support.

    “He should be targeting support to those who need it, not helping people invest in buy-to-let properties and holiday homes.

    “An unnecessary subsidy for second home-owners will only worsen the housing crisis by reducing the supply of homes overall.

    “We need a credible plan from Tory ministers to build the homes our country needs and get people on to the housing ladder. We didn’t see that this week.”

    A Treasury spokesperson said: “The housing market has been hit hard by the outbreak with 175,000 missing sales – so we are doing everything we can to get the country moving again.

    “Our cut in stamp duty will help drive growth and support jobs across the housebuilding and property sectors.

    “Those buying second homes or buy-to-let properties will continue to pay an additional three per cent on top of the standard SDLT rates.”


    #2
    The conservatives have made a bad enough job of how they’ve financially dealt with the Coronavirus issue but I feel so relieved that we weren’t under a labour government throughout all of this.
    Anyone with half a brain knows that the only thing the stamp duty cut achieves is to keep the house price bubble inflated because instead of paying a stamp duty bill every potential buyer either adds that money on to the offer they make on a house or adds it to their deposit to allow them to borrow a bit more (assuming they can afford the increase in repayments).
    Landlords are still paying the surcharge so I don’t see how they are benefiting from the stamp duty cut any more than a main residence buyer, they’ll still be paying the same amount of money out of their pocket just that it’ll be paid in the form of a slightly higher price for the house to make up for the cut in the standard stamp duty rate that has been cut for everybody. The only people I see benefitting from it are people who are selling a house but not buying another one because the money that would normally be paid in stamp duty will instead go in the sellers pocket.
    Ive got money set aside for deposits on 2 or 3 more properties but as a landlord this stamp duty cut doesn’t encourage me one little bit to go out and buy because I’m not stupid enough to think that it financially benefits me or any other buyers. I’m more worried about possible negative equity in the future than getting excited about a stamp duty cut.

    Comment


      #3
      My views exactly BTL investor.

      Another way to put it is that the SD cuts are a transfer of wealth from the taxpayer to the sellers of property (who do not go on to buy). I imagine the amount spent on the virus will make the lost stamp duty revenue feel like peanuts (the lost revenue was inevitable anyway given the collapse in transactions), hence why it was done as it keeps the voters happy for pretty much no additional cost.

      I was going to buy a few properties for BTL outside of my home city of London. The pandemic caused an abrupt end to this (at least for a while) and now I imagine I will be competing with others given the demand has been brought forward somewhat. Not something I want to compete with TBH. So now I have a nice problem of what to do with my cash savings which are slowly eroding by inflation. Asset prices, both financial and property, are in demand and it is near impossible to find good value assets.

      Comment


        #4
        leasee123

        Best thing to do is leave it in the bank and wait for the inevitable crash in prices, not sure exactly how big a crash it will be but i think that by this time next year the prices will come down by more than what I would make in a years rental income on a single property if I was to buy today.
        The stamp duty cut can only inflate the bubble for a limited amount of time.

        Comment


          #5
          But it is a very good opportunity to move a sub £500,000 property into a limited company; or out of it, or into a different limited company's ownership. This does not diminish the supply of housing for first time buyers etc. I wonder if the stamp duty on lease extensions is also abated? it's normally 0% up to £40,000 thereafter 4%.

          Comment


            #6
            Are you sure the sdlt applies to lease extension ? There is no change of ownership.

            Comment

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