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More support for stamp duty reform

More support for stamp duty reform

Category: Economy

Updated: 17/11/2009
First Published: 17/11/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The groundswell of support for a re-evaluation of how stamp duty is levied has grown further.

With the exemption from paying stamp duty on properties priced between £125K and £175K ending on 31 December, research from the Royal Institution of Chartered Surveyors (RICS) has suggested there could be a detrimental effect on the recovery of the housing market in regions that are already lagging behind.

More surveyors in the West and East Midlands, Wales and Scotland said they expected to see a drop in activity in 2010 when the holiday finishes.

Interestingly, however, the majority of surveyors overall said they were not anticipating the end of the exemption to have a distorting effect on the market, despite the benefit it has provided first time buyers.

"At the time of its introduction, we did question how great an impact this policy would have and judging by the fact that only surveyors in certain parts of the country are particularly concerned about the ending of the holiday, it could be said that some areas of the UK hardly even noticed the change," said Simon Rubinsohn, RICS chief economist.

"However, the additional transaction cost is still a worry to many, particularly first time buyers, and is a threat to the market in the areas of the country that are still seeing a weak price environment.

"A return to the status quo will benefit no one, and as such we believe that rather than simply reverting back to the old structure for stamp duty, the imminent change provides an opportunity for the Government to introduce a wholesale restructuring of the tax.

"Specifically we favour moving from the current slab structure to a marginal system with no homebuyer paying anything on the first £150,000 of their new home."

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