The government is considering a change in the way that Stamp Duty is calculated, to encourage more institutional investors to become professional landlords. The Treasury has issued a consultation document, Investment in the Private Rented Sector, asking the property industry whether changes to Stamp Duty bulk purchasing rules would impact property purchasing decisions, specifically with regard to residential property.
Currently, Stamp Duty is calculated on the whole transaction of a bulk purchase. As the rate charged rises progressively according to the value of the deal, one option is to calculate per property, not per transaction. As The Times puts it, "If the rules were changed, a purchase of 100 properties worth £150,000 each would result in a stamp duty bill of £150,000, rather than £600,000."
The consultation is part of government effort to tackle the UK housing shortage - where it's believed the private rented sector will play a crucial role:
The Private Rented Sector (PRS) plays a critical role within the housing system, helping to meet growing demand and providing a flexible tenure choice. It has also played a disproportionate role in funding new-build supply in recent years. It is important that the sector continues to grow and develop to help meet the housing challenge, and that it is able to respond effectively to changing demand.
Demand for rental housing is growing, spurred on by an increase in one-adult households, the rising age of first-time buyers and the effects of the credit crunch on turnover within retail property sales. Clearly, it's now essential that - whatever party is running it - the government partners with the PRS to ensure decent, affordable homes for all.
