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FTBs need more than stamp duty cut: Family BS chief

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The cut in stamp duty for first-time buyers in the last Budget will help, but more is needed to tackle the housing crisis, according to Family Building Society chief Mark Bogard.

In November Chancellor Philip Hammond scrapped stamp duty for first-time buyers on properties worth up to £300,000.

Bogard says the tax cut will do little to overcome the “suffocating” effect the tax has overall on the wider market.

He says: “It’s the easiest tax to avoid – just don’t move. It is preventing those already on the property ladder from moving which traditionally has freed up housing for first time buyers.”

Bogard recently wrote to the Chancellor to ask for further changes to the tax to encourage older home owners to downsize to free up the market.

Family Building Society recently published a report saying the tax was preventing many people from moving.

It said this was worst in London and the South East where property values are significantly higher than elsewhere in the UK.

In its response, the Treasury said there was no need for reform because of changes made to SDLT in 2014 and the fact that downsizing homeowners do not pay capital gains tax on profit.

It also claimed that any SDLT payable on those who did move would be less than estate agent’s fees.

Bogard is critical of the response.

He says: “That, of course, is not how real people think. It may be how the Treasury thinks about our money. But if people have to write out a big cheque to the Revenue, that is their money, out of their pocket.

“They do not think ‘Oh, how lucky am I to have the money because the Treasury very kindly gave me a tax break on my own house!'”

Bogard adds that the country needs a big rise in the number of suitable properties or the market will “gum up” again.

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