The Commons Treasury select committee (TSC) have stated the planned tax changes to curb buy-to-let investments could costs jobs and impact UK growth.
The cross-party committee of MPS said the increase in stamp duty on buy-to-let properties and second homes of 3% this April will result in the many landlords selling off properties, reducing the supply of available properties to rent and drive up rental properties, coupled with increase in tax on rental incomes from April 2017.
Rental properties are key to enable the ability of the labour force to move and live where the jobs are. Any restriction on accommodation will impact business making it harder for companies to employ staff. “Any impediment to labour mobility will reduce employment, economic activity and the economy’s long-run productive potential,” the report said.
The new 3% stamp duty tax rises is expected to raise over £600 million per year in new taxes and expected to raise £3.8bn in taxes over the course of this parliament, according to the Office for Budget Responsibility (OBR).
With plans to restrict landlords from claiming tax relief of mortgage interest costs from April 2017 many landlords may simply sell properties or pass on the costs to tenants.