Autumn Statement 2015: Stamp duty surcharge on buy-to-let properties will hit tenants not landlords, claims Blick Rothenberg
George Osborne's three per cent surcharge on buy-to-let properties will harm tenants rather than landlords, chartered accountant Blick Rothenberg has claimed.
Announced as part of yesterday's Autumn Statement, the charge has been branded a "badly-timed mistake", which could have the unintended consequence of pushing rental rates up, as landlords look to offset the higher costs they face when buying properties, it is claimed.
The proposed charge will add £7,500 to the cost of buying a £250,000 property, rising to an extra £13,500 for a £450,000 property.
Read more: Stamp duty changes may be the final straw for landlords
Blick Rothenberg partner Frank Nash said: "The chancellor has openly admitted that more affordable housing, including the private sector, needs to come forward to allow people to become owner occupiers and achieve their aspirations. However, it will take at least five years and, until those homes are built, young families have no choice but to rent.
“The problem is that until these new homes are built, private rented property is price inelastic. Landlords need to protect their investment and are expected to pass the cost on in the form of higher rent. This reduces a tenant’s ability to save a deposit for a home of their own, and in turn their ability to make best use of the range of the Help-to-Buy initiatives."
This rise in stamp duty land tax (SDLT) comes on the back of Osborne's move in July to restrict the tax relief that landlords can claim on their mortgage interest.
“The principle of allowing wider home ownership by creating private affordable housing is necessary, but the SDLT surcharge combined with the earlier mortgage interest relief restriction may not have the long term effect the chancellor intended, passing these additional costs onto tenants," Nash added. "Both tax measures needs to be rethought in the coming months."
He added: "The chancellor needs to speed up the supply of housing, from planning through to completion and think carefully about how to deliver the homes that the Help to Buy Schemes were designed for.”