The Intermediary Mortgage Lenders Association (IMLA) believes that Stamp Duty remains an issue for buy-to-let investors and older homeowners looking to downsize.
As of 1st April 2016, an additional 3% Stamp Duty surcharge was brought in for buy-to-let landlords and second homebuyers. This surcharge applies to residential properties being purchased for £40,000 or more and up to the value of £125,000. However, the rate increases with the price of the house:
- 5% surcharge on £125,001-£250,000 purchases
- 8% surcharge on £250,001-£925,000 purchases
- 13% surcharge on £925,001-£1.5m purchases
- 15% surcharge on purchases over £1.5m
Kate Davies, IMLA executive director, says: “Removing stamp duty for these so-called last time buyers would help those who want to downsize to move into smaller, more manageable properties for retirement. It would also increase the availability of larger houses suitable for growing families and ease the movement in our housing market.”
She has also highlighted that in a buy-to-let market, private landlords across the UK are under significant pressure from a layering of tax changes. This includes the additional 3% Stamp Duty surcharge on additional homes.
Davies points out that the latest quarterly Stamp Duty figures from HMRC show that many buyers are still being deterred from entering the market because of this tax. It’s also preventing small-scale landlords from investing to grow their portfolios.
Davies explains: “It is critical that the Government puts the brakes on any further legislation that could restrict the Private Rental Sector (PRS). Our recent report on buy to let shows that this market could be topping out and measures like Stamp Duty are putting immense pressure on private landlords.
“There are unintended consequences of squeezing the PRS in order to boost home ownership, not least driving up rents and limiting the choice for tenants across the country.”