All rates of Stamp Duty should be halved immediately and then scrapped altogether, while the 3% surcharge on buy-to-let properties and second homes should be ditched without delay.
The calls come from the influential TaxPayers’ Alliance, which is also demanding that the Government immediately bin its forthcoming cap on the amount of mortgage relief landlords can set against tax.
The TaxPayers’ Alliance this morning issued a report which pulls no punches, describing recent tweaks to the tax system as “gimmicky”.
The Alliance said that the Government must undertake “real reform” to solve the housing crisis.
It tore into previous administrations for “tinkering around the edges”, which had only worsened the situation and driven up prices.
It said that taxing landlords was in reality taxing tenants, because rents would rise.
In calling for first the halving and then the abolition of all Stamp Duty Land Tax, it described this as an “unfair tax which stops people from buying their own home, settling down with a family, moving for work or downsizing. It makes the dream of home ownership ever more distant for millions of families.”
It added: “Stamp Duty is a disastrous and unfair tax which leads to the misallocation of housing stock and leads to lower incomes and higher unemployment than necessary. It doesn’t even raise much revenue, once dynamic effects are fully accounted for.”
In other parts of today’s hard-hitting report, the Alliance criticises local authority landlord licensing schemes as hitting tenants in the pocket.
It is also calling for the “urgent” liberalisation of planning, including the declassification of some Green Belt. It says that declassifying 5% of Green Belt around London would allow it to expand by almost a sixth.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “For decades, politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply.
“What’s more, Stamp Duty is still punitively high, and gimmicky tweaks to the tax system will ultimately end up penalising tenants and increasing rents.
“The new Chancellor should now seize the opportunity to drastically simplify and reduce property taxes, while removing planning restrictions which prevent huge swathes of land from being built on for no good reason at all.”
“For decades, politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply” in part that’s true but the real problem is that HMRC have for decades failed to estimate and gather in all of the SA105 L&P tax due.
At £1000/sqm HMRC fail to collect tax would build about 20,000 3 bedroom family homes each year. About 250,000 homes haven’t been built since I first raised this with HMRC; getting on for £20 billion.
The extended limitation period for Tax means that money can still all be collected along with another possible £10 billion from before I start to keep an estimate.
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Reducing or removing stamp duty on property sales, will lead to an increase in house prices. That is the real intention of the Tax Payers Alliance. That it represent people who already have homes, and the British obsession with house values. The typical Daily Express reader.
This has been proven with previous changes in stamp duty, and even earlier this year with the rush by BTL applicants, there was a brief period of increased house prices, due to the demand. I witnessed it. But the psychological effect is the people ‘think’ that they are saving money.
We live in a society where taxes are spread across a wide range of products and services, that is how we do pay for our public services such as health, and the police.
The Tax Payers Alliance is a very biased group, and they are not influential, as the article suggested. Just loud mouthed, and grab attention.
Many other countries have a far higher tax on properties, and less of a property crisis. You simply pay less for the house to start with.
It is all about the vested interest of certain groups to continually push up house prices, which has nothing to do with the actual supply and demand. It is all simply about those vested interests pushing for higher returns.
The root cause is not a chronic supply, it is simply the high price of housing. The demand is not there, because the price is too high. To use an analogy, if the price of say a standard car such as a Ford Focus, were trebled, the demand would fall dramatically. That is exactly how the British housing market works. Push prices high, and blame ‘demand’. There is far more involved than simply supply and demand. Many people cannot afford to buy, so they do not buy, and those that do buy, are subject to the above inflationary pressures of vested interests.
There has always been a high demand for housing, ever since man first created a roof over his head, it is how that ‘demand’ is managed, and that certain bodies try to make an excess profit, and political gain over a basic human need.
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“…certain bodies try to make an excess profit… over a basic human need.”
If, by ‘certain bodies’ you are referring to 99.99999% of people who wish to sell the property they own at the highest possible price, then I’ll give you that one – albeit slightly misleading.
Other than that – your summing up of the TPA is bang on.
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i can’t think why they didn’t listen to you.
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“The demand isn’t there”
I didn’t just read this, did I?
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Banda Property’s Edo Mapelli Mozzi has penned an open letter to the new Chancellor of the Exchequer, Philip Hammond, beseeching him to halve SDLT levies to boost the property industry and the economy…
An open letter to Rt Hon Philip Hammond MP, Chancellor of the Exchequer
Dear Mr Hammond,
The EU Referendum has been blamed for the current stagnation in the property market. In fact, disproportionately high Stamp Duty Land Tax levies have done considerably more damage to the market, its associated industries and the supply of new homes than anything else.
Halving Stamp Duty Land Tax levies across the board would reboot the housing market, restore healthy transaction levels and enable people to move to jobs, while also delivering a huge boost to associated professions and services
Higher taxation at the top end of the property market since the end of 2014, expected to deliver a quick, easy win for the Treasury, instead delivered a £620m drop in receipts the following year. New data released last week reveals stamp duty receipts of just £250m in the first half of 2016, a 12.3% fall compared to the same period in 2015.
Economic progress is generated by trade, which creates wealth. At a time of economic uncertainty, as we seek to guide the economy through the turbulence of an impending Brexit, it is senseless to maintain extortionately high transaction taxes which impede the movement of people, stifle economic progress and deliver lower tax receipts overall.
The Taxpayer’s Alliance estimates that around 1.1 million jobs are directly dependent on the housing market, including construction and associated industries such as estate agency, surveying, legal and removals services. The knock on effect through lost jobs, lost income tax and a higher welfare bill, is vast.
Halving Stamp Duty Land Tax levies across the board would reboot the housing market, restore healthy transaction levels and enable people to move to jobs, while also delivering a huge boost to associated professions and services.
By acting swiftly and decisively, it is possible to reverse the downturn, restore confidence and send a clear signal to householders this Government supports home ownership and mobility.
There is no time to lose.
Yours sincerely,
Edo Mapelli Mozzi, CEO, Banda Property
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Yeah… good luck with that.
Quoting MUOTSS from the TPA or any other vested interest source won’t help.
Neither will adopting the ‘Open Letter’ mentality.
It’s so H1 2016…
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