Rachel Reeves’s ‘most damaging tax’ could trigger rental nightmare for thousands _ Hieuuk
The Chancellor used October’s Budget to hike up stamp duty for second properties, a move which could ultimately hurt those she sought to protect.
The Chancellor hiked stamp duty for those buying their second property (Image: Getty)
Rachel Reeves’s changes to stamp duty look set to leave buy-to-let landlords with a whopping average bill of £16,190 for a buying a home, new research shows.
The Chancellor announced the changes in her October Budget as she ripped up tax breaks brought in by the Conservatives in 2022 and increased stamp duty for second properties from 3% to 5%.
But despite Labour’s claims that they intended to help renters by providing them with enhanced security, figures from the Office for National Statistics (ONS), Zoopla and Rightmove show that landlords’ tax bills are set to increase significantly, with renters on the hook to shoulder the cost.
The figures show that based on the average price of a buy-to-let home across Britain, stamp duty bills will almost double from £8,452 to £16,190 in April 2025.
The changes are likely to have several knock-on consequences, most notably higher rental costs as landlords seek to offset the tax increase.
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Reeves’s first budget as Chancellor saw the announcement of record tax hikes (Image: Getty)
Stamp duty is a tax paid on the purchase of a property in England and Northern Ireland and is paid as a percentage of the property price.
Following the Budget, head of the Institute for Fiscal Studies Paul Johnson blasted stamp duty as “the most damaging tax we have”.
He went on to claim the changes would “make things even more immobile and increase rents even further”.
Last month, property site Rightmove recorded a 6% increase in new sellers, an indication that landlords are looking to ditch their properties to avoid an increase in tax.
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The changes could see rent increases or evictions as a result of a policy designed to protect them (Image: Getty)
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Marcus Dixon, head of UK living and residential research at JLL, warned the changes could also act as a deterrent to those considering entering the market in the first place.
He said: “Entry costs for buy-to-let investors have risen sharply post-Budget.
“Exit costs – or capital gains tax – remaining static post-Budget means we expect we’ll continue to see fewer new entrants than landlords leaving the market.”
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