The Chancellor has been accused of missing an opportunity to boost the housing market by failing to reform the “outdated” stamp duty tax.
Today the Chancellor announced foreign property owners who do not live in the UK will pay capital gains tax on residential properties sold in this country from 2015.
He also announced a £1bn programme to unlock development sites around the country, but there was no mention of stamp duty reform, something many in the industry have long called for.
Many in the mortgage market want stamp duty to be reformed away from a “slab” structure to a more marginal system similar to income tax.
Under the current slab structure the duty is charged at the highest rate on the whole of the purchase price, including the parts below the threshold, whereas under the marginal system proposed by the CML the higher rate of tax would only be charged on the part that crossed the final threshold.
Countrywide chief executive Grenville Turner reiterated calls for stamp duty reform and also said people buying properties worth under £250,000 should be exempt from paying the tax.
He says: “We believe today’s Autumn Statement was a missed opportunity for the Chancellor to announce further measures to help first and second time buyers, homeowners and the UK housing market as a whole.
“We handle more housing transactions than anyone else in the UK and as a result, we see first-hand the issues facing property buyers and home movers and one key issue is the stamp duty land tax system, which we believe in its current format is outdated and prohibitive to promoting growth in the housing market.
Royal Institution of Chartered Surveyors chief economist Simon Rubinsohn says: ”It was also disappointing to see long overdue changes to stamp duty have been ignored, particularly as the amount of revenue generated from this is rising sharply. The government plans to collect more than £60bn over the next five years in stamp duty receipts from British householders.
”Moving away from stamp duty brackets to a marginal system would be a boost to those struggling with the cost of living and help boost the number of property transactions.”
Presently, borrowers purchasing a home under £125,000 are exempt from paying stamp duty. It is then taxed at 1 per cent of the purchase price between £125,001 and £250,000; 3 per cent between £250,001 and £500,000; 4 per cent between £500,001 and £1m; 5 per cent between £1m and £2m and 7 per cent over £2m.