There was a shock in store for landlords in the Autumn Statement as the Chancellor announced a three per cent stamp duty land tax surcharge on buy-to-let properties. But as ever the devil’s in the detail. On closer inspection it seems that landlords with smaller portfolios could shift their focus to Scotland, while it may be ‘business as usual’ for those with a large number of properties south of the Border – including funds and corporate bodies backed by overseas money.
Some MPs are vocal in their support of the proposed 3 per cent stamp duty land tax surcharge on buy-to-let properties in England and Wales, on the basis that it would be preferable for investors to use their capital more productively. It’s not easy to make sense of that reasoning because:
- Private landlords fill a vital role in housing provision, between social housing and private ownership;
- As a “nation of builders” (to quote the Chancellor), surely the provision of capital to fund housebuilding and all that goes with it is a clear part of the nation’s economic activity?
No matter, we are where we are.
So what of the stamp duty land tax proposals?
Individual landlords will pay a 3 per cent stamp duty surcharge on purchases; that much is clear.
But the Blue Book published yesterday states that the government will consult on the policy detail including 'whether an exemption for corporates and funds owning more than 15 residential properties is appropriate'. It’s clear from this that the government would prefer to see amateur landlords with only one or two properties leaving the sector, to be replaced by larger landlords, funds and corporate bodies potentially backed by overseas money.
As my colleague Stephen Hay points out below, we could now see small property investors in the rest of the UK seeking to increase their portfolios north of the Border.
Who would have thought it?