Hunt saved £100,000 by buying seven flats in one go
JEREMY HUNT saved nearly £100,000 in tax on his purchase of seven flats after exploiting a loophole in the Tory crackdown on buy-to-let landlords.
An increase in stamp duty introduced in 2016 means anyone buying a second home or buy-to-let pays a surcharge.
Buying a property in addition to a main home attracts a higher rate of land tax – three percentage points above the standard rate. For example, a £400,000 home means a £10,000 stamp duty bill. If it is buy-to-let, the bill goes up to £22,000.
However, bulk purchases of six properties or more are exempt, meaning Mr Hunt will have saved on his tax bill by buying seven homes in one go.
At the start of this year, Mr Hunt made such a purchase in an upmarket development in Ocean Village, Southampton. Other properties in the same building are on the market for between £450,000 and £1 million. As the taxman says “six or more residential properties bought in a single transaction” are exempt from the higher rate, Mr Hunt will have saved at least £94,500.
David Smith, of the National Landlords Association, said: “It looks bad that a minister is very clearly taking advantage of a poorly designed policy.”
When Chancellor in 2015, George Osborne introduced the higher rate because “people buying a home to let should not be squeezing out families who can’t afford a home to buy.”
Last week, the Parliamentary Standards Commissioner opened an inquiry into Mr Hunt after he initially failed to register with parliamentary authorities his interest in the company he used to buy the flats. He also initially failed to declare his shareholding to Companies House – a criminal offence punishable by a fine or two years in prison.
Mr Hunt told The Daily Telegraph the breaches were an “honest mistake” by his accountant that had been corrected. His spokesman said: “All the rental income is being donated to charity, which means there is no profit to pay tax on, and therefore no reduction in the tax payable or personal gain from these arrangements.”