MPs have voted against an amendment to prevent a tax cut from applying to buyers of second and additional homes.
During a debate on the Stamp Duty Land Tax (Reduction) Bill, Opposition Treasury Secretary Abena Oppong-Asare said that a clause which increases the threshold for people buying second and additional homes, would ensure that second home buyers, or landlords buying additional properties, received a tax cut of up to £2,500 on each transaction.
“Surely that is the part of the Bill that ministers must struggle hardest to defend,” she told the Commons. “Even if the government are determined to retain stamp duty cuts overall, surely they can see that a cut targeted at second home buyers is not the way in which public money should be used.”
Financial Secretary Victoria Atkins reported that there were about 1,025,000 residential transactions in the year 2020-21, of which about 237,000 related to additional property transactions, which includes not just second homes but also buy-to-let properties.
“The Opposition amendment would remove purchases of additional property from the scope of the Bill and the temporary cut to stamp duty land tax, which we argue would have an impact on rental supply and, in turn, tenants. Through the 3% surcharge in the Bill, we are ensuring that those who purchase additional homes - in other words both landlords and those purchasing second homes - will still pay stamp duty.”
Atkins added that the 4.4 million households in the rental sector remained a vital part of the housing market. “We must therefore ensure that the measures we take do not imperil or endanger that market, particularly when households are struggling with the cost of living. Further constraints on rental supply will mean higher costs for tenants.”
The Bill cleared its third reading – increasing the threshold for not paying stamp duty from properties worth £125,000 to those worth £250,000, which is due to end in March 2025.