Canterbury City Council is lobbying the government for a change in stamp duty rules so that local authorities do not pay the higher rate when buying properties for their housing stock.
In April 2016, increases in stamp duty came into force for anybody buying an ‘additional property’. Purchases up to £125,000 had a rise of three per cent (up from zero to three per cent) and purchases between £125,000 and £250,000 saw a further increase of three per cent (up from two per cent to five per cent) added on.
While the change appeared to be aimed at people purchasing additional properties such as buy-to-lets and second homes, it also applies to local authorities buying houses for local people to live in.
Between then and 31 March this year, the city council has bought 35 properties to add to its own stock and has had to pay £176,000 more in stamp duty than it would have done before April 2016.
And with an active property acquisition programme underway to buy further homes over the next year, the council is concerned about the additional stamp duty payments it will be required to make.
Council Leader Cllr Rob Thomas has written to the Ministry of Housing, Communities and Local Government asking for local authorities to not be subject to the higher rate.
Cllr Thomas said: “The extra money we have had to pay out in stamp duty could have funded the purchase of another home for a local family to live in, or to be used as temporary accommodation so that a family is not placed in a bed and breakfast in another district.
“While we understand the aim of the April 2016 changes, it is unfairly penalising councils who just want to provide places for their residents to live.
“We want to be able to put the maximum amount of money into homes for people rather than topping up government coffers and we’ll keep on at this until the rules are changed.”