A consumer group which supports the principle of a stamp duty surcharge on second homes and buy to let properties has nonetheless slammed the government's proposals as "dangerously flawed."
The HomeOwners Alliance says it welcomes policy on second homes in principle, but says the design “is so flawed that the government must go back to the drawing board.”
It says it welcomes the government’s stated ambition to help home owners, and in particular to recognise home ownership in the stamp duty system; to that end it supports in principle the government’s Autumn Statement announcement to charge a three per cent surcharge when people buy additional residential properties.
However, in its submission to the Treasury consultation on the surcharge - which closes today - the HOA says the way the government is planning to introduce the surcharge is so overly complex and flawed that it will lead to massive unintended consequences.
HOA chief executive Paula Higgins says the scheme as envisaged by Chancellor George Osborne is "ridiculously complex" and may damage the people it is intended to help.
"We are already being contacted by distressed homeowners who have worked out they will be caught by it, and not be able to buy the home they want to. Rather than push ahead with a well-intentioned but dangerously flawed scheme, it should go back to the drawing board and put it right.”
In its consultation response, the HOA advocates a simpler system than that outlined by Osborne.
“It is really simple – no one should pay the stamp duty surcharge if they are going to buy a home to live in, and homeowners need confidence that will be the case. However, if you are buying a residential property for any other purpose, you should pay the surcharge” says Paula Higgins.
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We have to remember that the proposed SDLT changes are not yet a done deal. The consultation period ended today and the final details will be announced in the budget in March and there has been a lot of opposition to some of the finer detail.
To say the proposals are confusing and complex is an understatement and yesterday, I submitted a response to the consultation on behalf of my Bold Legal Group member firms.
Most of my members will be contacting their clients shortly so that they can establish whether or not they will be affected by the changes (should they come to pass).
We have just prepared an ‘explanatory’ standard letter that will be sent out to clients over the next few days. Although we have tried to keep it as short as possible, and in order to make sure it is comprehensive, it is still a challenging read. If anyone would like to see a copy of the letter please email me: rh@boldgroup.co.uk
Good on you, Rob. Seems like people are going to need all the help they can get, with no-one quite sure what the new measures will actually mean. I'm not sure Osborne really knows what he's doing - just making it up on the hoof, as usual. Whatever happens, I'm sure he'll declare it another "major success".
I still think he's taking a major risk by annoying so many of his potential voters with this buy-to-let tax. His desperate play for the first-time buyer vote - which, if they had any sense, should be dismissed out of hand - has risked alienating another core of voters.
I somehow doubt the government will pay much attention to all these warnings.
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