"Overall, it was a Budget short on measures that impact our particular sector, but beneath the surface there are clear signals that SDLT is unlikely to be touched soon"
Indeed, I’ve heard it said that Philip Hammond was determined to make the final Spring Budget so incredibly uninteresting, that no-one would be bemoaning its departure from the political stage. This may seem rather harsh, especially given the gathering storm around increasing National Insurance Contributions for the self-employed, but you did get the sense that November’s Budget will contain far more of note than this last March iteration.
Returning to its so-called non-impact on our market, much of the post-Budget chatter was around the lack of action in key areas like stamp duty land tax. As has been the case for the last 18 months or so, calls for SDLT change were loud and clear in the lead up to March 8th, and once again, as we’ve tended to see significant measures announced at previous Budgets/Autumn Statements.
Hammond though is a different Chancellor/political beast to George Osborne and clearly sees no reason to change the SDLT status quo, at least (according to rumour) until he has more figures to judge the changes on, notably the 3% extra charge for those purchasing additional properties. It all means that calls for a u-turn on this policy were ignored, as were other prospective measures that were touted such as SDLT help for older homeowners seeking to downsize and perhaps a potential new SDLT holiday for first-timer buyers.
Despite the lack of SDLT mentions in the Budget itself, if you delved into the forecasts from the Office of Budget Responsibility – published alongside the Budget – you would be able to see why Hammond felt no need to change anything. Towards the end of last year, figures from the Treasury itself seemed to show the direction of travel in terms of the money SDLT was bringing in, particularly the new 3% extra charge, and the OBR forecasts seem to show this even more sharply.
In terms of residential SDLT revenues, 2016-17 is anticipated to pull in £8.3bn, of which £1.4bn comes from the additional property charge; looking ahead the OBR anticipates both main residence and additional property SDLT to increase significantly every year up until 2021-22 when total residential stamp duty is forecast to be £13.1bn, of which £2bn is anticipated to be from the extra 3% levy.
It is therefore unsurprising that Hammond would look at these figures and think, at the very least, there is no need for tinkering let alone any major changes. Plus of course, and we should not forget the political element in all of this, he did not introduce the extra charge himself and therefore probably does not feel accountable for a policy, judging on the OBR figures, which is actually going to bring in a significant amount of money that otherwise would not be forthcoming. Indeed, over the forecast period in total, the OBR anticipates £10.6 billion pounds from the extra SDLT charge – as a Chancellor looking at an uncertain future with Brexit taking place during this timescale, he might be forgiven for thinking such revenue cannot be jettisoned.
Overall, it was a Budget short on measures that impact our particular sector, but beneath the surface there are clear signals that SDLT is unlikely to be touched soon, certainly not in a significant way and that buy-to-let landlords in particular should get used to factoring this 3% extra charge into their sums for the foreseeable future. £10bn is a lot of money and I suspect the Government will not be turning it down, unless of course the next set of forecasts say something very different.
