The purchasers of second homes in Wimbledon who will be forced to pay the 3% stamp duty surcharge that was unveiled by Chancellor George Osborne this week could offset the higher buying costs against Capital Gains Tax.
In his combined Spending Review and Autumn Statement, Osborne doubled the government’s housing budget to £2bn and pledged to deliver an additional 400,000 homes by 2020.
The new stamp duty surcharge will add a 3% levy to each band above a £40,000 starting level. This means properties worth between £251,000 and £925,000 will be subject to 8% SDLT, which rises to 13% for second homes worth between £925,001 and £1.5m and a top rate of 15% for investment properties worth over £1.5m.
The move – which took property professionals by surprise – could disrupt the London property market over the next four months as landlords and pensioners rush to beat the April deadline.
David Cox, head of the Association of Residential Letting Agents, described the new surcharge as “catastrophic news for the private rental sector”.
And Brian Berry, chief executive of the Federation of Master Builders, warned: “Buy-to-let buyers will offset the cost and the danger is that might be passed on in terms of higher rents.”
But Osborne defended the move. He told parliament: “This extra stamp duty will raise almost £1bn by 2021 – and we’ll reinvest some of that money in local communities in London and places like Cornwall which are being priced out of home ownership.”
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