Government almost raised buy-to-let stamp duty surcharge to 4%

It’s likely the government changed its mind at the last minute on hiking the stamp duty surcharge for investors and second homeowners.

The Office for Budget Responsibility’s economic and fiscal outlook document, published after Chancellor Rishi Sunak’s speech, incorrectly states that the levy has risen to 4%.

The report said: “A three per cent surcharge on additional property purchases was introduced in April 2016. It has been raised to four per cent in this Budget.”

“HMRC has analysed the response to its introduction and found that it was strong.”

The Chancellor never announced a change in the Autumn Budget, while the Treasury has since confirmed that no alteration was made in the Budget.

The 3% stamp duty surcharge was first introduced in April 2016 by George Osborne when he was Chancellor.

The surcharge is seen as a major barrier for investors in buy-to-let, alongside the gradual reduction in mortgage interest tax relief.

It’s possible the government was looking to raise the levy to compensate for the stamp duty holiday on the first £500,000 of property purchases.

The holiday, which expired at the end of September 2021, has been blamed on overheating the housing market, as it stoked demand at a time when some were reluctant to list their properties due to the dangers of covid-19.

Leave a Reply