The Council of Mortgage Lenders has urged the government to reform the “blunt policy lever” of the 3% stamp duty surcharge which will come into force on April 1.
The Council of Mortgage Lenders has urged the government to reform the “blunt policy lever” of the 3% stamp duty surcharge which will come into force on April 1.
As it stands some residential buyers will be caught out and have to pay the 3% surcharge if there is an overlap between owning their previous home and acquiring a new one.To prevent this from happening the CML said buyers should be able to defer their stamp duty payment for 18 months.
The CML warned “there is a risk of overkill” with the 3% surcharge in combination with upcoming tax changes, as investor sentiment could be dampened to the extent that the flow of available private rented property is disrupted.
The trade body added that it will cause landlords to charge higher rents which will make it harder for tenants who want to buy to save for a deposit.
Paul Smee, CML director general, said: “Our longstanding view is that stamp duty is a blunt policy lever. Given the complexity of the proposals, we also suspect that in practical terms the surcharge could cause more problems than it solves.
“We urge the government at least to move away from a position where people will have to pay and then potentially claim back to one where payment is deferred, and only triggered if the buyer genuinely falls into the intended target category.
“If the surcharge proposal is designed to promote home ownership, we think that there should be better evidence as to why this requires a reversal of growth in the private rented sector.”
