The Labour party has labelled Chancellor Rishi Sunak’s announcement that landlords will benefit from a reduction in stamp duty a “bung”, which will only worsen the housing crisis by reducing the supply of homes.

Labour’s shadow housing secretary Thangam Debbonaire wants the Government to reverse its decision to give landlords and second home owners a tax break and has written to Housing Secretary Robert Jenrick asking him for the reason behind the decision.

Last week, the Government raised the stamp duty threshold to £500,000 on transactions including second properties. Although property investors and second homeowners will still pay a 3% stamp duty surcharge on purchases, they won’t pay any further duty on the first £500,000 of the property’s value. 

Debbonaire says: “It’s unacceptable that the Chancellor tried to sneak out this huge bung to second home owners and landlords while millions of people are desperate for support. He should be targeting support to those who need it, not helping people invest in buy-to-let properties and holiday homes.”

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Second properties

She points out that 34% of homes bought in 2019/20 were second properties, meaning that this policy could cost the exchequer £1.3 billion, which could instead fund the immediate gap in local council finances.

Debbonaire adds: “At a time when we have an acute local government funding crisis, I question how the Government can justify giving a tax break to people already fortunate enough to own an existing property rather than giving councils the funding they need.”

Labour believes that with more than one million people on council waiting lists, the money could be much better spent on affordable housing to buy or rent.

Read more about Labour’s rental sector policies.

4 COMMENTS

  1. “She points out that 34% of homes bought in 2019/20 were second properties, meaning that this policy could cost the exchequer £1.3 billion . . .”

    But this 34% includes everyone moving house when they buy their new house before selling their old one, which is very common. They are thus temporarily owners of two properties. Does the Labour Lady Ms Debonnaire not see this? She speaks as though the 34% are all landlords increasing their portfolios (to make decent homes to help house our fellow citizens who cannot afford mortgages or prefer to rent)!!

  2. Whereas the Government has been helping out the employed and the self-employed during the pandemic, landlords who have been left with EMPTY PROPERTIES are still left having to pay 100% Council Tax – plus mortgages plus insurances plus utilities’ standing charges.

    She should stop whining and do something very useful by lobbying parliament to help such landlords, many of whom are pensioners with just one rental home who have been relying on meagre rents to bolster their retirement pensions. Who speaks for them?

  3. What she does not mention is that the 3% second home charge still applies to purchases, so actually it would be helpful to the government if investors start to invest. The country needs investors to by properties and employ the trades to plumb the toilets, wire the electrics, fit the kitchens etc.

    Unfortunately Labour just like to stick to soundbites like Bung to landlords to win points with their supporters.

    Thankfully many of their supporters did not vote for them in the last election because they are just so crap!

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