AMI, CML and BSA get behind Stamp Duty reform campaign

16 November 2009 | By Robert Thickett

The campaign, dubbed the 1808 Coalition, has been set up by the National Association of Estate Agents and Association of Residential Letting Agents.

It believes that Stamp Duty is an anachronistic tax which, in its current form, is preventing a recovery in the housing sector - it limits market flexibility, creates regional inequality and its slab structure unfairly distorts the housing market.

The 1808 coalition campaign to reform Stamp Duty is named after the year Stamp Duty was first extended to property sales in Great Britain.

According to The 1808 coalition, the government should abolish Stamp Duty outright, or implement one of the alternatives:

* Suspend Stamp Duty for the duration of the housing downturn, with a commitment to review the existing system

*Reform the system moving from the distorting ‘slab’ system to a more progressive ‘slice’ system or progressive system which, like other taxes, is index-linked to inflation

* Or raise the starting threshold for this tax well above the current £175,000 limit to ensure that as much is done as possible to assist first time buyers into the market.

The current Stamp Duty holiday for properties lower than £175,000 is due to expire at the start of 2010 but in a recent survey by the NAEA, 91%t of estate agents surveyed felt that it should be extended. 86% of those surveyed felt that the tax is unfair.

Mortgage Strategy has had its own long running campaign to reform the Land Tax called Step Up Stamp Duty. Over the years thousands of Mortgage Strategy readers have supported it.

In addition to AMI, NAEA, ARLA, BSA and the CML, other trade bodies to have given their support to the 1808 Coalition include the Home Builders Federation and the National Landlords Assocation.

Peter Bolton-King, Chief Executive of the NAEA, says: “With the Pre Budget Report due soon, now is the time for the government to take action.”

Ian Potter, Operations Manager of ARLA said: “Not only does Stamp Duty prevent those aspiring to own a home from doing so, it also impacts the whole property chain. For ARLA members, this means having to pay Stamp Duty on the bulk price of a portfolio, when individual buy-to-let investors pay a lower rate on the single unit price.”

Robert Sinclair, Director of the AMI, said: “It is rare that the breadth of our industry comes together with such consensus on an issue.  But the current Stamp Duty regime is distorting the market to such an extent that we feel compelled to speak out. AMI is fully committed to supporting this industry campaign to reform the regime. We implore the government to not only listen but, to act in support of our request for change to this damaging tax.”

John Stewart, director of economic affairs at the HBF, says: “It is imperative that the first signs of market stabilisation that have emerged in recent months, and which have allowed home builders to begin tentatively opening new sites and expanding output and employment, are nurtured.

“The government’s stimulus measures for housing, including the raised stamp duty threshold, have played a significant part in this stabilisation and it is vital that they are not removed at this still fragile stage, either in total or in part.”

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