SDLT: Expert calls for a scrapping of stamp duty surcharge rules – renters would benefit
MORTGAGE holders and renters have been impacted by coronavirus and there are fears that these respective markets will struggle further when this period is over. Changes have already been introduced to offset these issues but some are calling for additional support.
Mortgages are a very complex financial reality. People purchasing a home in England or Northern Ireland will have to pay stamp duty land tax (SDLT) on their purchase if it costs more than £125,000. On top of this, the government recently introduced a stamp duty surcharge of two percent for non-UK tax residents.
This surcharge was introduced in the March budget and it’s designed to boost domestic home purchasing in the UK and reduce the amount of purchases from overseas buyers.
Stamp duty is an unavoidable reality of modern home purchasing for many but it has become a clear target in light of coronavirus issues.
Last month, the Royal Institute of Chartered Surveyors (RICS) and the National Federation of Builders (NFB) called for a stamp duty holiday to come into effect once the current lockdown ends.
This suggestion was put forward in an effort to boost the struggling housing market once this tough period comes to an end.
This would particularly affect the buy-to-let (BTL) industry which has become fairly crucial in recent times, especially as coronavirus has increased the demand for rentals as it becomes harder to buy.
The rental market is expected to increase in the coming months too.
The UK private rented sector has grown significantly in size in recent years, jumping from 2.8 million households in 2007 to 4.5 million in 2017, according to the Office for National Statistics.
Knight Frank, the real estate consultancy, predicts that nearly six million households – approximately a quarter of all households – will be privately renting by the end of 2021.
Because of these findings, some experts within the field are calling on the government to ease restrictions on the BTL scene, which includes changes to stamp duty surcharge rules.
Mary-Anne Bowring, the Group Managing Director at Ringley, commented on the recent stamp duty holiday suggestion.
As she said: “A stamp duty holiday would no doubt cause a rush of transactions and help breathe life into a housing market that has been put into deep freeze in an effort to battle coronavirus.
“The government should be looking at long-term solutions as well as short-term sticking plasters when it comes to fixing the UK housing market.”
“Millions of Brits were already renting, and that number was predicted to grow anyway with or without coronavirus.
“The disruption caused by coronavirus will likely see rental demand grow, as banks squeeze potential buyers with tighter lending restrictions and people put off buying or selling a home as it becomes clearer COVID-19 will cause continued uncertainty and disruption in the medium term.
“Eliminating additional stamp duty for buy-to-let investors would help stimulate the supply of rental homes while also driving wider activity in the housing market.
“Landlords are a crucial source of development finance through off-plan sales and will help support getting Britain building again.”
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