Scrapping the stamp duty penalty on buying rental properties would actually make the Government more money, the National Residential Landlords Association has concluded.
According to analysis conducted for it by the economic consultancy Capital Economics, removing the three per cent stamp duty levy on purchase of buy-to-let properties would result in more private rental properties being made available – almost 900,000 new private rented homes over the next ten years.
Resulting income and corporation tax receipts would ensure a £10bn boost to Treasury revenue over the same period, said NRLA. And increased revenue streams would continue over decades to come.
Capital Economics suggested that without changes in tax or other policies, the private rented sector stock will decrease by at least a further 500,000 properties over the next ten years. The immediate fillip provided by scrapping the stamp duty penalty would reverse this trend and help solve the housing crisis.
‘The Government needs to wake up to a crisis of its own making. Taxing landlords out of the market serves only to cut supply, increase rents and make home ownership more difficult to afford’, said NRLA chief executive Ben Beadle.
‘The evidence clearly shows that the supply of rented housing is declining as demand increases and will continue to do so. The Government is taking a blinkered approach to the issue, which is not helped by its reluctance to admit mistakes it has made in the past.
‘It makes no sense to tax the supply of new homes supplied by landlords investing in new build or bringing empty homes back into use. As this study indicates, removing the tax will actually generate more revenue, not less’.