Calls to ditch ‘stupid’ stamp duty for good
Budget: Sunak announces stamp duty nil rate extension in March
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Last-ditch calls have been made for Chancellor Rishi Sunak to make the stamp duty holiday permanent so movers will be spared a tax hit in the months ahead. On Thursday, the stamp duty threshold for residential properties will be slashed from £500,000 to £250,000, before falling to just £125,000 from October 1. The stamp duty holiday is seen as a key reason why UK house prices surged 9.5 percent in the year to May.
And now Julian Jessop, of the Institute of Economic Affairs, wants the tax to be scrapped for good.
He warned: “The constant tinkering with stamp duty is distorting the property market, leading to big swings both in house prices and in the number of transactions.
“Most economists agree stamp duty is a particularly damaging tax and it would be better to scrap it completely.”
Tom Clougherty, head of tax at the Centre for Policy Studies, said: “We know stamp duty reduces sales, messes up the housing market and hurts the economy.
“It’s probably the worst tax on the UK statute books.”
He urged Mr Sunak to “permanently increase the threshold on primary residences to £500,000”.
Conservative MP Ben Everitt said: “Stamp duty is a stupid tax. The Chancellor’s extension to the holiday has been an absolute lifeline for movers and the sector.
“It’s obvious stamp duty needs replacing with something. But how to shift ourselves away from this tax without leaving a blackhole in the Treasury remains an open question.”
Marc von Grundherr, director of London-based estate agent Benham and Reeves, said: “The stamp duty holiday has been incredibly successful in terms of reigniting the
market in the wake of pandemic lockdown restrictions and it’s on course to save homebuyers across England over £3.4billion in tax.
“Given the fact it was introduced to fund a war against France, many homebuyers will be wondering why it still exists at all.”
Matthew Cooper, founder of Yes Homebuyers – an online business which buys homes direct from sellers – expects house prices to fall.
He said: “The latest house price data has shown that in the lead up to the original March deadline property prices started to dip.”
In 2019-20, stamp duty on residential property raised £8.4billion for the Treasury.
Kevin Hollinrake, a Tory MP who founded Hunters Estate Agents, described stamp duty as a “killer”.
But he said finding an alternative way of raising revenue meant the challenge of replacing it had been put in the “too difficult pile”.
John O’Connell, chief executive of the TaxPayers’ Alliance, urged the Chancellor to take the axe to the controversial tax. He said: “Stamp duty is a terrible tax and the temporary cut has been a boon to many Britons.”
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