- The three per cent stamp duty on second homes was imposed back in April
- Landlords complain the tax is an attack on investors to swell Treasury
- HM Revenue & Customs announced it’s doubled takings on second homes
- Since April there have been 86,400 purchases of additional properties
- Accounts for £1.28billion in stamp duty – £670million due to surcharge
Landlords have handed over almost £700million to the taxman in just six months after being hit by a new buy-to-let levy.
The 3 per cent stamp duty surcharge on second homes was imposed on April 1 in a bid to cool the booming buy-to-let market.
But landlords have complained that the tax is an attack on investors and an attempt to swell the Treasury coffers.
Yesterday HM Revenue & Customs revealed the policy has doubled its takings from additional property purchases.
Since April there have been 86,400 purchases of additional properties, accounting for £1.28billion in stamp duty receipts – £670million of which is due to the surcharge.
The tax adds three percentage points to usual stamp duty.
It means a landlord buying a house priced between £125,000 and £250,000 would pay 5 per cent in stamp duty, instead of 2 per cent.
The surcharge was announced in 2015 by then chancellor George Osborne amid fears that the surge in landlords was pushing up house prices and shutting first-time buyers out of the market.
But critics claim the levy also affects tenants, parents buying for their children or people buying a holiday home.
David Cox, of the Association of Residential Letting Agents, said: ‘While landlords are the ones paying the tax, it is in fact tenants that are footing the bill in higher rents.
‘If the Government’s aim is to provide a home for all, taking £700 million from hardworking tenants is a self-defeating move.’
The Bank of England has warned that the rise in buy-to-let poses a threat to the UK’s financial stability.
If interest rates rise, landlords could find their loans unaffordable, so flooding the property market and sending prices plummeting.
From April 2017 new rules will be phased in to stop landlords claiming tax relief on the interest on their mortgages.
Last night Betsy Dillner, of campaign group Generation Rent, said: ‘The Government’s landlord surcharge has clearly had a successful first six months … It has been too easy for speculators to ride the property market, shutting out would-be first-time buyers in the process, so it is only right that the Government uses the tax system to deter or mitigate this.
‘The Chancellor now needs to use those proceeds to help people who remain a long way from home ownership by investing in new rented homes for low income households.’
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