It’s at this time of the year that we think about our Christmas wishes and, after this, our new year’s resolutions. From a personal point of view they might focus on relationship or health goals, perhaps just to be a better you, while from a professional viewpoint it might all be about building better businesses, launching products or simply developing your team.
Given the line of work we’re in, and the overall importance of a fully-functioning housing market to UK plc, I can’t help but thinking there will be many (like me) wishing for a Government rethink when it comes to stamp duty land tax.
For years, we talked about the need to simplify the system away from its former ‘slab’ nature, which the Government did eventually do, however moving on from this – particularly the increases for higher-priced properties and the extra 3 per cent charge for additional property – we appear to have overly complicated a system which encourages people to stay put in their own homes, rather than move.
Consider a friend of mine, who owns a buy-to-let property himself but his ‘main residence’ is in his wife’s name only. If they want to buy a main residence together, he will be charged the 3 per cent extra – it’s perhaps no wonder that they’re going to stay put.
Projections for Stamp Duty take by the end of the decade are severely down on just a couple of years ago. In November 2014, stamp duty was expected to bring in close to £20bn in 2019/20, now it’s anticipated that it will bring in £14.3bn. There has to be a better way. What could have been a cash cow for the State based on increased transaction levels has been dealt a severe blow – just at the time when you suspect, with Brexit, that the Government will need all the tax take it can get its hands on.
The purchase market is, for want of a better phrase, bumping along the bottom with many potential purchasers put off purely by the stamp duty they’re going to need to stump up. It surely now makes sense to reappraise what we have in place and to develop a simpler system that does not bend over backwards to put people off purchasing for the first time, moving for the second time, adding to portfolios, or working up that ladder.
2017 is likely to be a challenging year as it is, however it’s within the grasp of the Government to look again and to deliver a boost to the housing and mortgage market, whilst at the same time increasing its revenues from stamp duty. At the moment, there appears little to cling on to, and with such economic uncertainty, we want to provide those with the confidence to move, every opportunity to do so.
Harpal Singh is managing director of Broker Conveyancing