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Mon, 28 September 2020

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Labour accuse Rishi Sunak of £1.3bn ‘secret giveaway’ to landlords and second home owners

Labour accuse Rishi Sunak of £1.3bn ‘secret giveaway’ to landlords and second home owners

Labour is calling on the Government to reverse the decision “to give a tax break to second homeowners”.

3 min read

Labour has accused the Chancellor of handing a £1.3bn “bung” to second home owners and landlords.

Shadow Housing Secretary Thangam Debonnaire said buyers of buy-to-let properties, holiday homes and other second properties stood to benefit from a hefty cut in stamp duty announced by Rishi Sunak this week.

The opposition frontbencher accused ministers of giving “a large tax break to owners of second homes at a time of an acute housing crisis”.

But the Conservatives hit back, saying Labour stood “against plans to help thousands of families across the country”.

The Government this week unveiled a temporary cut in stamp duty on all homes under £500,000 in a move designed to boost the housing market.

The changes, which took effect yesterday, mean the levy now applies only to the sale of properties worth £500,000 or more, rather than those valued at £125,000 or higher.

But, in a letter to Housing Secretary Robert Jenrick, Ms Debonnaire hit out at a further reduction in the stamp duty rate for second home or buy-to-let buyers.

Under the Treasury's changes, people buying a second property will now have to pay stamp duty at 3% on properties worth £500,000 or more.

That is down from a rate of 8% on second homes or buy-to-let properties worth a quarter of a million pounds.

“If someone bought a second home yesterday for half a million pounds, they would have expected to pay £15,000 more than they would today,” Ms Debonnaire said.
 
And she added: “In 2019/20, 34% of homes bought were second properties meaning this policy could cost the exchequer £1.3 billion.

"This could fund the immediate gap in local council finances, which the LGA predicts will be £1.2 billion by the end of the year. 
 
“At a time when we have an acute local government funding crisis, I question how the Government can justify giving a tax break to people already fortunate enough to own an existing property rather than giving councils the funding they need.
 
“Over a million people are on council waiting lists whilst the number of new social homes has fallen by 80%.

"This money could be much better spent on truly affordable housing to buy or rent, rather than on a tax break for second homeowners.”

Labour is calling on the Government to reverse the decision.

But Conservative co-chair Amanda Milling took aim at Labour, saying the party had “no plan for our country”.

“It beggars belief that Labour is against plans to help thousands of families across the country,” the Tory MP said.

“Our plans mean 90 per cent of people getting on or moving up the property ladder will pay no stamp duty at all.”

And she added: “Sir Keir Starmer’s Labour will turn whichever way the wind blows. They say different things from one day to the next to try and score political points and chase headlines.
 
“Labour has no plan for our country, and while they waste time deciding, we are getting on with doing – creating jobs, supporting businesses, investing in infrastructure and leveling up across this country”.  
 

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