The government chose Christmas Bank Holiday Monday to launch its formal consultation on the ‘additional properties’ stamp duty surcharge, first announced in the Chancellor’s Autumn Statement in November.
The consultation, which you can see here, runs only until February 1.
The document makes it clear that the higher rates will only apply to purchases of additional residential property - buy to lets and second homes - which complete on or after April 1 2016. If contracts exchanged after November 25 2015 - when the surcharge was first announced - then the higher rates will apply if the purchase is completed on or after April 1 2016.
However, if contracts were exchanged on or before November 25 2015 but not completed until on or after April 1 2016, the higher rates will not apply.
The consultation is lengthy and discusses issues that have exercised the agency industry in the past few weeks, including joint ownership, married and civil partners, buying properties by parents for their children, what happens when a completion is delayed, and so on.
There is also consulation over how Multiple Dwelling Relief and/or SDLT may be applied in cases of multiple property purchases, as well as the treatment of large scale investors.
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The BIGGER point is not the piffling STAMP DUTY that the whole industry and press seem to be fixated on -
but is:
The fact Landlords will no longer be able to offset the full loan interest against tax.
This is DISASTER for landlords with a large mortgage on a property!
EG: If a landlord has a high mortgage interest (say) £700 PCM and rent coming in of (say) £1k - after paying service charges and net of tax relief - it is likely landlords will have to pay out each month between £300 and £400 in tax to subsidise their tenants to live at that property!
There is a disaster on its way for a hec of a lot of BTL Landlords - and its nothing to do with Stamp Duty!
I may be stating the obvious here, but this so-called consultation process is evidently nothing more than a sham. Annex B of the consultation document lists seven code of practice consultation criteria, none of which this consultation actually meets. For example, "Consultations should normally last for at least 12 weeks with consideration given to longer timescales where feasible and sensible." This one only lasts five weeks.
Annex B also says, "If you feel that this consultation does not fulfil these criteria, please contact..."
and then provides a broken email address link. So the only way to voice any concerns over the consultation process is to write a real letter, which means your concerns are unlikely to be heard, due to the short timescales involved and Royal Mail's preference for losing letters rather than delivering them.
Given the impact these proposals will have on the housing market, it would be nice if the government could at least abide by its own code of practice for consultations. It's obviously just a paper exercise to make it look like stakeholders are being consulted, but government doesn't care about our views, and doesn't care that we know it. Otherwise there would be a proper consultation, in accordance with the code of practice - at least then they could PRETEND they cared!
Well guess what, the link to the email address for the 'Consultation coordinator' does not work either and, despite extensive searching of the site and Google, no such email address can be found!
What can we do to show them up EAT?
Its disgraceful that they are so blatantly disrespectful and high handed!
If you wish to make your views known to the consultation team, here are the email addresses:
sdltadditionalproperties@hmtreasury.gsi.gov.uk
stamptaxes.budget&financebill@hmrc.gsi.gov.uk
Emailing the team will ensure your voice gets heard and the legislation gets amended accordingly
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