Signatures Swell For UK Property Tax Petition As Government Responds

A petition calling on the government to reintroduce full mortgage interest relief and drop the 3% stamp duty surcharge has garnered over 15,000 signatures in just one month.

The petition, launched on 14 May, was set up by property multi-millionaire Mark Homer, the co-founder of networking and educational community Progressive Property.

If the petition reaches 100,000 signatures before 14 November, the petition will be considered for a debate in Parliament. 

In April 2016, the government introduced a 3% stamp duty surcharge on the purchase of additional or second homes.

A year later, it began the process of reducing the interest tax relief that buy-to-let landlords can claim on their mortgages to the basic rate of income tax.

The petition claims the measures are driving landlords away from the rental sector, which is increasing homelessness as tenants are faced with less choice and higher rents.

“It is time to review the tax changes on buy-to-let landlords. It’s clear that the availability of rental property has decreased and rents have risen markedly,” the petition states. “We call for policy change to end these disastrous tax policies which cause such profound suffering.”

After reaching 10,000 signatures the government was required to respond to the petition.

It claimed higher stamp duty on additional dwellings and restricting finance cost relief seeks to support first-time buyers and level the playing field for homeowners. “Neither measure is expected to impact rent levels,” it stated.

The government said it introduced changes to finance cost relief as part of a package of measures in the Summer Budget 2015 to help reduce the deficit and rebalance the economy:

“By restricting landlord’s finance cost relief to the basic rate of income tax we are helping to reduce the advantage landlords may have over homeowners in the property market. Income tax relief for finance costs is not available to ordinary homebuyers. It is also not available to those investing in other assets, such as shares, so we’re helping to reduce the distortion between property investment and investment in other assets.”

Previously, landlords could get relief on their finance costs at their marginal rate of income tax.

Using self-assessment data, HMRC estimates that one in five landlords will pay more tax on their property income because of this measure.

In response to calls to scrap the stamp duty surcharge, the government stated that while it is right that people should be free to purchase a second home or invest in a buy-to-let property, this can impact on other people’s ability to get on to the property ladder.

It claimed the higher rates are part of the government’s commitment to support first-time buyers. “Since the higher rates have been introduced, over 500,000 people have bought their first home, and first-time buyers make up an increased share of the mortgaged property market,” it added.

In the Autumn Budget 2017, the government announced further changes to permanently increase the price at which a property becomes liable to stamp duty to £300,000 for first-time buyers.

DealMakerz reckons the petition stands a good chance of getting the required 100,000 signatures, given how unpopular the measures have been.

TV star Sarah Beeny, the owner of estate agent Tepilo, has described the Chancellor’s decision to temporarily scrap stamp duty for first-time buyers as a PR stunt.

She claimed the only people it will help are first-time buyers purchasing high worth properties who already have the funds to do so.

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