The annual round of what the chancellor should not include in his Budget – which typically precedes what he should – has started with calls to leave buy-to-let investors alone.
Two former Cabinet ministers have urged Philip Hammond not to raise investors’ tax liabilities, following reports that the Treasury will use Budget 2018 to hike their stamp duty premiums.
Sources told the Sun that putting up the 3%-15% SDLT surcharge on additional property purchases would be “sold” to the public as a measure to ease the housing crisis.
Tory policy advisers made a similar case last month, saying the party should ‘rebalance the housing market away from owning for a return and towards owning for a home.’
The advisers’ preferred means was to ratchet up curbs on mortgage relief interest, but it is another of ex-chancellor George Osborne’s creations, his 2016 levy, that is in the crosshairs.
“I understand one option being considered is a further increase in the Stamp Duty rate for buy-to-let properties,” revealed The Spectator’s political editor James Forsyth.
“This would, so the thinking goes, raise money for the Exchequer and help keep house prices down.”
John Redwood, former trade secretary, countered to the Daily Telegraph: “There is no need to increase taxes and if you carry on increasing them you’ll collect less money”.
However the subsequent comments of Lord Lilley, a former social security secretary, imply that the decision by Treasury officials may have been made already.
“The only two ways to get house prices down are to build more houses or prevent people buying them, by putting taxes on them. They’ve opted for the second one,” he said.
The comments come after contractors on social media said the ‘limited company workaround’ to the mortgage interest relief clawback could eventually be targeted with measures from HMRC, backdated to when landlords switched from individual to corporate form.