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Contrary to its original estimates, the so-called Landlord Tax has raised twice as much as Treasury officials originally estimated it would. Since the extra 3% Stamp Duty for landlords and homeowners investing in second or subsequent properties was introduced in April 2016, the government has raised £2 billion.
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“The Government will need to urgently consider whether the additional 3 per cent stamp duty policy is helping achieve fairness in the property market, or if it is creating more problems than it is solving,” says a leading accounting firm, Blick Rothenberg.
Levelling the Playing Field
The policy was introduced to deter landlords and property investors from snapping up affordable homes earmarked for first-time buyers. It was supposed to “realign the residential property market” and “make it fairer”. Unfortunately, this doesn’t appear to have happened.
Figures suggest landlords and investors are still buying properties, so first-time buyers are not seeing any improvement to their prospects.
Extra Stamp Duty Damaging the Economy
Many experts believe the overhaul of Stamp Duty across all sectors is actually causing irreparable harm to the economy and creating unwanted social problems because people can’t afford to move. Indeed, there are fears that increasing Stamp Duty on more expensive properties is causing a dramatic slowdown in the luxury housing market.
Some have even dubbed it a “tax on moving” and urged the Chancellor to cut the tax in his next budget.
