A political think tank founded by Margaret Thatcher has called on Boris Johnson to follow up on his promise to scrap Stamp Duty on all purchases below £500,000 and labelled the levy a ‘tax on mobility and aspiration’.
The comments are made within a report published over the weekend by the Centre for Policy Studies (CPS) written by Alex Morton, a former advisor to David Cameron.
Called ‘Stamping Down’, it claims that the duty acts as a barrier to people living in the kinds of homes they need and ‘having a serious impact across the economy’.
The report highlights the slow rise in Stamp Duty since 2005. Then it was £1,585 per transaction but has subsequently risen to a median figure of £2,400. London has been hit the hardest, where it has risen from £2,324 to £13,500 over the same period.
Morton’s report suggests abolishing Stamp Duty outright or raising the zero-rate barrier from £125,000 to £500,000, as Boris Johnson suggested during his Premiership campaign.
Abolishing the tax would see transactions rise by 25% to 990,875 while raising the threshold would see them increase by 22.3% to 968,000, the report claims.
As well as raising the threshold to £500,000, the report also suggests levying a 4% duty on homes between £500,000 and £1 million and 5% on those over £1 million.
“While the Treasury is right to be fiscally focused, they need to take into account the fact that stamp duty on homes has an impact on transactions, which means cutting this tax is cheaper than expected,” says Alex Morton (pictured, top).
Read more about Stamp Duty.