Despite the Stamp Duty Land Tax reforms making house purchases cheaper for 98% of home buyers, revenues from the tax are still likely to soar.
Paul Johnston, director of the Institute of Fiscal Studies, said that SDLT revenue is forecast to increase from £7bn in 2013-14 to £16bn in 2019-20.
He described the reform of SDLT as “rather modest”, adding: “This is certainly not the substantial overhaul of the taxation of housing we need.”
Meanwhile, shadow chancellor Ed Balls says he will press ahead with Labour’s Mansion Tax on homes worth over £2m if his party wins next May’s general election.
He made the pledge on national TV following Wednesday’s sweeping Stamp Duty Land Tax reforms, which will see buyers of £1m-plus homes paying more duty.
Buyers of homes costing between £2m and £3m will now face an SDLT bill of £153,750 – an increase of £53,750.
Labour’s Mansion Tax plans would require owners of homes in that price bracket to pay £3,000 a year.
The Institute for Fiscal Studies says owners of properties worth £3m and above would have to pay some £10,000 a year to achieve Labour’s target of raising £1.2bn annually.
Balls told ITV: “I think people at the top with properties over £2m aren’t paying enough tax at the moment – 95% of them are not moving in any year and they should be paying more.
“I want to get some money for the NHS and I think particularly for foreign investors but for also people with very high value properties, the Mansion Tax is fair.”
With respect, if Mr Balls were attending to the detail of the property economy rather than electioneering, headline grabbing policies he might have some idea of just how much un-collected cash is metaphorically down the back of the Country's sofa.
I am not sure if £810,000,000 ( demonstrable conservative estimate) could be put to good use in the NHS but surely if he were running the economy with the same attention to detail Agents are expected to exercise with money laundering and immigration checks, he might show the faintest hint of sounding as if he is qualified to be considered as a Chancellor.
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