Autumn Statement 2015: Stamp Duty blow for buy-to-let investors

25 November 2015
The Chancellor has announced that buy-to-let landlords will face a 3% extra Stamp Duty from April 2016.Criticising the fact that more and more homes are being bought as buy to lets and second homes, George Osborne pointed out that many of them are cash purchases and are bought by overseas buyers – so are unaffected by the restrictions he introduced on mortgage tax relief in the last Budget.Osborne said: “Frankly, people buying a home to let should not be squeezing out families who can’t afford a home to buy. So I am introducing new rates of Stamp Duty that will be 3% higher on the purchase of additional properties like buy to lets and second homes.”He added that the government would consult on the details so that corporate property development isn’t affected.Osborne said this extra Stamp Duty would raise almost £1 billion by 2021 – and that the government will reinvest some of that money in local communities in London and others parts of the UK, such as Cornwall, which are being priced out of home ownership, as well as helping to raise the funds to build new homes.Commenting on the Stamp Duty rise, Jeremy Leaf, former RICS chairman and north London estate agent, said: “In hiking Stamp Duty on buy to let, Osborne is trying to level the playing field further, but in aiming for political expedience he is demonstrating practical naivety. Many buy-to-let investors underpin some of the bigger developments, in particular. There is a danger that it will kill the market and result in some developments not happening at all.“Landlords will either sell or not add to their portfolios at a time when we need more affordable accommodation. Such a move inevitably puts extra upward pressure on rents.”Stuart Law, chief executive at Assetz for Investors, added: “Buy-to-let investors have been robbed a second time (following the new ‘tenant tax’ or tax on buy-to-let mortgage interest payments for higher-rate tax payers), yet are providing something invaluable: homes for rent when saving for a deposit and home ownership is increasingly out of reach of many.“The buy-to-let investor should not be blamed for house price rises, rather, this is down to the chronic shortage of house building in this country, which is compounded by population growth.”

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