An estate agent has called for the new Government to apply the same logic to Stamp Duty on property purchases that historically has been applied to Corporation Tax.
William Wells, residential director of Mulluck Wells, in Hertfordshire and Essex, says that as the rate of Corporation Tax in the UK has come down over the years, the amount collected by the Revenue has actually gone up.
He said: “It sounds counter-intuitive, but it’s true. The lowest-ever rates of Corporation Tax have led to the highest-ever amount of income for the Treasury – currently standing at £56bn.
“This is because low Corporation Tax encourages companies to come here, hire staff, and do business – all of which means the amount of tax collected actually rises.
“The same would apply to Stamp Duty, which is currently paid by everyone buying a property over £125,000 – starting at 2% of the property value up to £250,000, 5% up to £925,000, a huge 10% up to £1.5m, and an eye-watering 12% for properties over that top figure.
“These extortionate rates have had a massive impact on people’s ability to move house at what is already a very expensive time in their lives. And there’s no question that the new highest rate has caused a collapse in the number of sales of more expensive properties.
“Just as high rates of Corporation Tax drive business away, cutting jobs and wealth creation, all the evidence indicates that the effect of leaving the middle and top rate of Stamp Duty at these ridiculous levels is costing the Government coffers a considerable amount of money in lost revenue directly through a lack of transactions.
“Stamp Duty needs to be lowered, and lowered immediately.
“Of course, there’s no denying that an increased number of sales would be good for estate agents. But more importantly, it would also be good for buyers who would benefit from the lower rates, the market as a whole which would become more fluid, and good for the UK economy which would have a significant injection of additional tax as a result.”
I second these comments, more transactions equals more spending on products, builders etc for peoples homes.
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I can still see the labour deputy leader of the day gloating on TV at raising stamp duty to stop the house buying process … remember him…. two jags, two jabs, anti posh tosh, now residing in the House of Lords. If it was done to stop the market, why continue now? First time buyers should not pay stamp duty.
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What is often overlooked is the importance of the house buying/selling process to trade in the UK. Generally a seller becomes a buyer . Whoever acquires a new home , be it rental or purchase ‘creates’ business and VAT on the way for those concerned.
You buy/rent a house, then white goods, then redecoration, then soft furnishings, carpets , curtains/blinds. employment for local builders, DIY inspired purchases, garden centre trade and the list goes on and on.
So with particular relevence to the UK a healthy housing market has great benefits all round to the high street retailers and wider trade , not to forget the exchequer.
William’s comments make sense but then he works in the real world while politicians do tend to spread manure across the fields to feed the heifers!
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Well put Nick.
It feels as though the politicians have completely forgotten how much a healthy and vibrant housing market adds to the local economy in a country where so much of our GDP is based on or around consumer spending.
As Woodentop suggested, first time buyers shouldn’t have the additional cost of stamp duty as a barrier to their first step into home ownership. Most moving homeowners can cover it out of the proceeds of their sale, but for FTB’s it can be a significant unnecessary cost.
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The problem is, that politicians lose touch with reality and most are career politicians so have no grasp of reality at all. There has been a huge amount of lobbying about SDLT but the government are not interested in reducing it, as they are fearful that the general public will perceive this as giving back money to the rich. We are now in the era of “the politics of envy” and much of the public, although unwilling to get off their backsides and earn a living, has a dislike of anyone with aspirations. This means that the government is frightened that they may lose these numerous and important votes. The suggested so called Dementia Tax proves the point – out of touch with the people. So, this brings us back to SDLT and why this or any government will not reduce this tax.
1 They don’t want to
2 It will lose votes for them
3 Even if the tax take is less than hoped or less than in previous years – so what – it’s a vote winner.
I suppose we should count ourselves lucky that we avoided the Mansion Tax, but that’s probably only a matter of time!!
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