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Industry steps up the Stamp Duty pressure

The mortgage industry is gearing up for this autumn’s pre-Budget report and backing Mortgage Strategy’s Step Up Stamp Duty campaign, which now has a whopping 5,000 supporters.

Despite chancellor Gordon Brown’s decision to raise the Stamp Duty threshold to 120,000 in the last Budget, industry figures are already warning that more must be done to help the property market and that pre-Budget time is the perfect opportunity to put the pressure on.

Ray Boulger, senior technical manager at John Charcol warns that a slowdown in the property market is on the horizon if Brown makes taxes too high and leaves borrowers unable to get onto the property ladder.

Boulger also backs the Step Up Stamp Duty campaign and calls for changes to Inheritance Tax law, but says that real change is unlikely to happen.

He says: “An ideal scenario would be to see both Stamp Duty and Inheritance Tax abolished, but this will not happen. The number of estates liable for Inheritance Tax has risen hugely. A fairer solution would be for the government to raise the starting rate for the tax, or to grant exemptions for private residents.”

Boulger also stresses that despite the government being keen for people to use their property to help with their pension, Inheritance Tax rules make it difficult for the house to be passed onto the child.

Melanie Bien, associate director at Savills Private Finance, says it would be great to see Brown help first-time buyers by moving the Stamp Duty threshold up further.

But she stresses that what the industry really needs is clarification on plans for self invested personal pensions.

She says: “We need final guidelines for SIPPS. The longer they leave it, the worse it will be. Once we know, we can put plans in place.”

There are also fears Council Tax bills could increase by hundreds of pounds a year if government plans are passed to make houses with attractive views pay more.

Tax payers could end up paying more if they live in a conservation area, next to an open space, have a swimming pool or tennis court or enjoy full or partial views of the sea, hills, mountains or lakes. The changes could come in after plans for the revaluation of each property in England, which hasn’t taken place since 1991.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester says: “I don’t think that we are going to see any changes in Council Tax until after the revaluation, which has already been postponed. The problem of Council Tax is ongoing,

“I don’t see why it can’t be changed so that Council Tax increases in line with inflation,”

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