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Shock stamp duty hike was considered for Budget

It now appears that landlords had a narrow escape with this week’s Budget.

The Daily Telegraph has discovered that a report by the Office for Budget Responsibility - the independent financial department that advises the government - considered increasing the additional homes stamp duty surcharge from three to four per cent.

The increase was not in fact announced and will not be implemented - at least as yet - but page 219 of the OBR report, issued after Chancellor Rishi Sunak sat down, gives the game away.

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The report - not corrected before it was released - says on p219: “A three per cent surcharge on additional property purchases was introduced in April 2016. It has been raised to four per cent in this Budget. HMRC has analysed the response to its introduction and found that it was strong.”

However, The Telegraph analysis says that an accompanying chart in the OBR report suggests that if the hike had been implemented, buy to let investors would go on to purchase fewer properties and the tax take would, proportionally, be less than might have been expected.

 

The three per cent surcharge for buy to let and holiday home purchases remained in place throughout the ‘holiday’ from July 2020 to September 2021 during which principal residences enjoyed varying stamp duty exemptions.

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    Just another cost that would need factoring in when considering maximum bid and future rent, it has been proven many times before that increased taxation equals less tax being collected .

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    We didn’t have a narrow escape he did as we will not be buying anyway. The 3% additional surcharge made sure of that. What Planet are the on and can they not even do basic arithmetic. Say buy a property for £500k how much deposit you’ll need, what repayments will be, add all other costs & god help you if it requires a HMO License and all the compliance that goes with it, hopefully you’ll be buying with an EPC that will last until at least 2025. How are you doing so far find Tenants hope you don’t have to pay an Agent if so it’s approximately 11% in London with the vat, be aware if you not a Company you are a second class citizen and loan interest not allowed for tax purposes, how are the figures stacking up now just add on £30’000. Stamp Duty how long is it going to take to recover that if you survive that long. Oh you have to do all this on £1500 pm and good Tenants with no voids!!

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    Full C/tax on voids for a non service, there is only one way interest rates can go and that’s up, good luck, no more blog today I have things to do.

  • Matthew Payne

    It does appear though that once again Mr Sunak "gets it". Since he has been appointed, LL beating does appear to have stopped in spite of many recommendations from 3rd party agencies to up the ante.

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