BUDGET 2010: AMI slams £1m Stamp Duty as political opportunism
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The Association of Mortgage Intermediaries has criticised the Budget as a missed opportunity and says Stamp Duty remains “sorely in need of proper reform.”
The trade body has welcomed the introduction of a zero rate of Stamp Duty on properties up to £250,000 for first-time buyers.
But it says that by limiting this move to first-time buyers the government has taken away the potential benefits for areas outside of London.
AMI is also critical of the 5% in Stamp Duty to be levied on homes over £1m.
Robert Sinclair, director of AMI, says: “By introducing a new level of the tax at £1m we continue to have an unfair slab tax that will cause a £10,000 jump in the tax for a £1 increase in the price of the property.
“This smacked of political opportunism.
“With the increase from 1 to 3% at the £250k figure as well, this is a significant cost to be borne and added to loans.”
The Budget report also revealed that HMRC is to start talks with lenders about the formal introduction of an income verification service which would make tax returns data available to lenders.
Sinclair suggests that the HMRC income verification scheme has already been running since 2007, but was cut short in January this year.
He says that in implementing this scheme the government would need to be careful that self-employed borrowers were not adversely affected.
On the announcement that the regulation of second charge lending will be transferred from the Office of Fair Trading to the Financial Services Authority, Sinclair says this is a welcome development.
He adds: “In time this will simplify advice for the consumer and encourage a more holistic approach from intermediary firms.”
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Readers' comments (4)
Mike Fitzgerald | 25 Mar 2010 12:00 pm
The goverment decision to limit the Stamp duty Tax on tshe first £250,000 would have been of great benefit to the housing market IF it was not restricted to First Time buyers only.
A first time buyer may want to buy a property with a partner who had a mortgage a few years ago and because of divorce is now back in the market.The new ruling now means that this couple has to pay the tax.
The Goverment has lost yet another opportunity to help people get back on the housing ladder and this seems just another cynical pre election ploy
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Anonymous | 25 Mar 2010 12:13 pm
The increase in the tax on properties of £1 million or more is nothing more than the 'politics of envy'. Roll on May and we'll finally be rid of them for good!
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Brian Fitzpatrick | 25 Mar 2010 12:16 pm
The Devil, as always, is in the detail. The trouble is the detail is somewhat lacking.
Trying to find the treasury definition of a "First Time Buyer" for example is a real needle in a haystack job.
Does anyone know where this definition can be found?
It is crucial to many potential buyers!
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David livesey | 25 Mar 2010 2:28 pm
Never look a gift horse in the mouth!
This is a positive move and can only help confidence in the housing market. Particularly for FTB's who are the oxygen underpinning the market.
Brian, you are spot on about the Devil being in the detail, and the detail can be found in the HMRC SDLT Technical Note. Look up Budget 2010 on the HMRC website.
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