The CML has criticised the government for failing to raise the £60,000 Stamp Duty threshold, claiming an additional 138,000 homebuyers will be liable to pay the tax this year.
In its pre-Budget submission, the CML says the failure of successive governments to raise the threshold for more than a decade means it is now a particular burden for first-time buyers. The amount paid by homeowners has more than quadrupled in the past five years to over £3.5bn annually.
The lender body is proposing new Stamp Duty tax allowances, calling for thresholds to increase automatically in line with house price inflation. The failure to index the inheritance tax allowance in line with house prices means that tax is now payable on an increasing number of estates, with housing-based wealth contributing £340m to inheritance tax in 2000/01.
Peter Williams, deputy director-general of the CML, says: “With revenue from taxes rising sharply and a series of further regulatory costs already in the pipeline the time has come to cap the financial burden on homeowners by ensuring tax allowances and thresholds are automatically indexed.”
Alan Hinett, proprietor of Wolverhampton-based Jupiter Financial, says: “Stamp Duty is a con and the threshold should have been increased substantially a long time ago. Rises in property prices should be one of the factors that govern how tax is administered rather than basing it all on the retail price index.”
The CML also highlights that statutory regulation will cost the mortgage industry a one-off sum of £136m and a continuing annual amount of £68m based on figures released by the FSA.