The chancellor has abolished multiple dwellings relief for stamp duty land tax.
Among a raft of property tax reforms, Jeremy Hunt said stamp duty relief for people who purchase more than one dwelling in a single transaction was intended to support investment in the private rental sector.
However, an external evaluation found “no strong evidence that it had done so and that it was being regularly abused” and as a result, the chancellor announced that he was going to abolish the relief.
Matthew Todd, associate director at RSM UK, said: “That's one way to get rid of the abusive claims in the space but that news will not be well received by property investors."
Capital gains tax
Additionally, Hunt announced a reduction in the higher rate of property capital gains tax, which will fall from 28 per cent to 24 per cent.
Hunt said both the Treasury and the Office for Budgetary Responsibility have looked at the costs associated with current levels of capital gains tax on property.
“They have concluded that if we reduced the higher 28 per cent rate that exists for residential property, we would increase revenues because there would be more transactions,” he said.
Todd stated that this represented some “good news” for landlords who may be forced to exit the rental market, but pointed out that the residential property CGT rate is presently tied to the rate for carried interest and asked “will that follow suit?”.
Furnished holiday lettings
Lastly, Hunt stated that in recent months, following representation from members from places such as North Devon and New Quay, he had been looking closely at the furnished holiday lettings regime.
He stated that he was “concerned” that this tax regime is creating a “distortion”, meaning there are not enough properties available for long-term rental by local people.
“To make the tax system work better for local communities, I am abolishing the furnished holiday lettings regime,” he said.tom.dunstan@ft.com
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