Iain Duncan Smith Calls For A Review On Buy-To-Let Taxes
‘We should reconsider the way we treat private landlords who buy houses to rent’ said Mr Duncan Smith while writing in Conservative Home (A Conservative news website). He has also called on The Prime Minister to scrap the move to phase out tax relief on buy-to-let mortgages.
The Conservative party’s treatment of landlords has, for some time, been blasted by landlords. Back in 2015 former Chancellor, George Osborne, introduced a wave of measures that he claimed would benefit first-time buyers. This included a 3 per cent surcharge on stamp duty for buy-to-let properties and second homes. Mr Duncan Smith wrote that ‘We are now in danger of missing the point, for what is certain is that even if we do achieve our housebuilding target, there will still be a continuing growth in demand and significant part of this will have to be available through private landlords’
Mr Duncan Smith went on to say ‘A large number of them (buy-to-let landlords) are talking about no longer buying to let, and they blame it on George Osborne’s decision to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax and to tax a landlord’s turnover rather than profits. This, they believe, has led to private landlords scaling back their operations or even leaving the sector altogether.’
Activity in the buy-to-let market has been severely affecting by a series of tax changes, with transactions falling significantly in April 2016 after the stamp duty surcharge was applied. However this pushes investor to the North East of England as the price of properties and gross yield achievable is proving very attractive to London buyers, who the stamp duty levy affected the most.
The words of warning from Mr Duncan Smith went on to state ‘We should all be concerned about this because private landlords are a significant provider of the additional housing we need. We won’t be able to provide all the housing in the medium term through aggressive building programmes alone. We will need other sources of accommodation, as well’
Back in March former Conservative Chancellor, Norman Lamont warned that the changes to stamp duty has left the British tax system ‘unbalanced’ and that he was ‘concerned by the impact of stamp duty on the housing market’
Earlier last month, former Bank of England economist Professor David Miles warned that the government had wrongly blamed landlords for the UK housing crisis and said politicians attack on landlords for spiralling house prices were ‘profoundly wrongheaded’.
The stamp duty change has had little effect on the market in the North East of England, mainly as the stamp duty levy was introduced as a London centric policy to slow the market down therein. The North East with its high yield and well-priced property represents a great opportunity to still invest in buy-to-let. If you’re looking to invest in the North East of England – call us today on 0191 5700 086 or email email@example.com
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