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Posted on January 29th 2024 by movingin-adm

Chancellor Jeremy Hunt urged to scrap stamp duty levy on additional homes

The National Residential Landlords Association (NRLA) is calling for the chancellor Jeremy Hunt to abolish the 3% stamp duty levy on the purchase of additional homes, including buy-to-let properties, ahead of his Budget statement in March.

Increasing the supply of homes for private rent would boost the government’s finances by around £10bn, equivalent to almost the entire Affordable Homes budget, according to the NRLA.

The assessment follows the submission of NRLA’s proposals to the government ahead of the Budget on 6 March, amidst a supply crisis in the rental market. Research findings suggest that an average of 11 prospective tenants now make enquiries about every available property to rent.

Independent analysis by Capital Economics also reveals how scrapping the 3% stamp duty levy on the purchase of additional homes would see almost 900,000 new private rented homes made available across the UK.

As a result of increased income and corporation tax receipts, Capital Economics’ modelling indicates this would lead to a £10 billion boost to Treasury revenue over the same period. For context, this is the equivalent of almost the entire £11.5 Affordable Homes Programme budget for 2021-26.

The stamp duty levy was introduced in 2016 with the then chancellor, George Osborne, arguing that it would prevent landlords squeezing out families who want to become homeowners. His reasoning was refuted by the London School of Economics which argued that “nationwide only a minority of sales to landlords involved bids from both types of buyer.”

Its views have been shared by director of the Institute for Fiscal Studies (IFS), Paul Johnson, who warned in a piece for The Times that: “The more harshly that landlords are taxed, the higher rents will be.”

Ben Beadle, chief executive of the NRLA, said: “The chancellor needs to pull out all the stops to tackle the housing crisis.

“Growing the private rented sector is not only vital if tenant demand is to be met, but it would also provide a substantial boost to Treasury coffers, enabling it invest in vital public services.

“It makes no sense to discourage investment in desperately needed private rented accommodation. Inaction will only result in more misery for prospective renters.”

Original article from Property Industry Eye – Marc Da Silva