Stamp duty reform tops policy poll


Published: Friday 28th November 2014 by The News Editor

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An overhaul of the stamp duty tax on properties is the reform that home-movers would be most keen to see put in place after next year’s general election, a property website has found.

Rightmove asked more than 41,000 people who were in the process of buying a new home or planning to do so to choose from a wish-list of housing policies they would like to see put in place following the election next spring.

Home-movers could select more than one choice.

More than one in three (35%) people surveyed wanted to see the price brackets for stamp duty changed, while 30% would like to see it scrapped completely.

One in five (19%) people surveyed last month thought first-time buyers should pay no stamp duty at all.

Some 31% of home-movers would also like to see Labour’s “mansion tax” plan on homes worth over £2 million put into action, a proposal which has attracted some criticism, with the controversy taking an unexpected twist recently when singer and presenter Myleene Klass tore into the idea.

Households typically pay nearly £12,000 in stamp duty over the course of a lifetime of climbing the housing ladder, according to recent research by Lloyds Bank.

The rigid ”slab” structure of stamp duty has been strongly criticised in recent years, particularly as surging house prices have pushed more homes into higher tax brackets.

With Chancellor George Osborne poised to deliver his Autumn Statement next Wednesday, bodies including the Building Societies Association (BSA) have also been pressing for reforms to the levy.

Sales of homes are free of stamp duty up to the value of £125,000 and attract a 1% tax above this level and up to £250,000.

But rising house prices as the housing market has gathered pace mean that more purchasers face paying at the higher rates of 3% applied to homes worth over £ 250,000 to £500,000, 4% on those valued at over £500,000 up to £1 million, 5% on those over £1 million to £2 million and 7% beyond that point.

The tax is imposed on the total value of the property, so someone buying a home for between £250,000 and £500,000 pays between £7,500 and £15,000.

Stamp duty takings from sales of UK homes have surged by more than £1.5 billion year-on-year as the housing market has moved further into recovery.

The total Stamp Duty Land Tax (SDLT) yield from sales of residential properties in 2013/14 was £6.45 billion, marking a 31% increase on a total of £4.9 billion in 2012/13, recent HM Revenue and Customs (HMRC) data has shown.

Meanwhile, one third (33%) of those questioned by Rightmove also wanted to see an extension of the Help to Buy scheme, which gives people with 5% mortgage deposits a helping hand onto or up the property ladder.

Policies that would have a less immediate impact on the housing market tended to receive a more muted response from home-movers.

Some 21% of those surveyed would like to see a major council house-building programme started, while 18% would like the number of homes being built to be doubled and 9% would favour more new towns being built.

Rightmove director Miles Shipside said: “It’s understandable that home-movers want the policies that will help them in their current situations, whether they’re a first-time buyer with a smaller deposit wanting to use the Help to Buy scheme to get a step on the housing ladder, or a second-stepper worried about stamp duty bands.

“While these policies could temporarily help more home-movers, it’s the house-building programmes that really need ramping up so that there are more affordable homes for people in areas of high demand.”

One in 16 (6%) people who said they were looking to move in the next 12 months specifically said the general election had had an impact on their home-moving decisions, suggesting there may not be too much disruption to the housing market next spring as people wait to see who will form the next UK Government.

Published: Friday 28th November 2014 by The News Editor

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