Stamp Duty should be reformed and be charged in £100,000 increments to stimulate activity within the housing market, a leading industry figure has claimed.
David Westgate, Group Chief Executive of 80-branch estate agency firm Andrews says that a ‘complete and thorough’ review of Stamp Duty by the Chancellor within his Budget on 29th October is essential in order to reverse the alarmingly sluggish sales market in many parts of the UK.
Andrews says Stamp Duty in its current form adds too great an upfront expense to what is an already costly expercise and this consequently puts people off moving home.
Hammond’s Stamp Duty
“Whilst I’d love to think that a flat rate of Stamp Duty, levelled at 1% could be a viable alternative to the current system, the reality is that the sums simply wouldn’t add up,” says David (left)
“However, a reconsideration of the boundaries at which the duty comes in to play could be made. Increasing each banding by £100k could have a positive effect across the board and stimulate movement in the market.”
“Whilst either of these moves would result in smaller individual Stamp Duty receipts, the overall net effect would be to stimulate greater transaction levels and in doing so, ensure that the total funds generated for the Exchequer were at least maintained, if not, increased.”
At the moment it is not charged on homes bought for under £125,000 but levied at 2% on the next £125,000 up to £250,000, 5% onwards up to £925,000, 10% onward up to £1.5 million and 12% on anything over £1.5 million. First time buyers pay nothing on homes of up to £300,000 and 5% on the portion up to £500,000.
Westgate’s ideas are not the only ones circulating at the moment. Other proposals include tax incentives to encourage landlords to sell their buy-to-let properties to long-standing tenants of three years or more, and Theresa May’s mooted 3% additional Stamp Duty for non-UK based home buyers.