View more on these topics

Budget must ban stamp duty, says Boulger

Stamp duty should be temporarily banned in this year’s Budget in an attempt to stimulate the housing market, says John Charcol’s Ray Boulger

Senior technical manager Boulger is calling on Chancellor Alistair Darling to temporarily take the axe to Stamp Duty on residential property; he says this move would cost the Government less than £2bn, but would “provide a lot of ‘bang for buck’ in the current environment”.

Boulger says: “There are two reasons behind the suggestion that this suspension should be for an unspecified period: firstly, prospective purchasers could not risk delaying too long on the basis that they had, say, a year, in which to buy without paying stamp duty and secondly, the Chancellor of the day would have discretion as to when to reinstate the tax and could therefore fine-tune this with an up-to-date view of the state of the market.

“This would also provide an ideal opportunity to make the tax fairer when it was re-introduced by avoiding the sudden jump in its cost at the threshold levels.”

John Charcol says revenue from stamp duty has collapsed in light of the approximate 60 per cent drop in property transactions and 25 per cent drop in prices. The latter causes revenue to fall more because it takes some properties out of the net completely and moves many from the 3 per cent tax band down to the 1 per cent band and others from the 4 to the 3 per cent rate.

As a result the brokerage estimates that the current run rate of revenue from stamp duty land tax is now well below £2bn, and so forgoing this would only cost about one sixth of the cost of the one-year VAT cut.

Boulger says: “Borrowing the extra required to finance 3 per cent or 4 per cent stamp duty was easy until the credit crunch, but can now be difficult with the much lower maximum loan to values in today’s market. Even if a borrower is able to extend their loan to cover the cost of stamp duty, being pushed into the next loan to value mortgage band will increase the cost of the whole loan, possibly substantially.”



Broker bundle conundrum

Abbey’s proposals to bundle mortgage deals with other products like current accounts have been greeted with cautious optimism by brokers.

Managing customers in drawdown

By Lorna Blyth, Investment Marketing Manager Delivering a decent drawdown review process takes time and resources. This article looks at how you can manage drawdown clients in a more cost-effective way. Most advisers are seeing an increase in drawdown clients following pension freedoms. Often these are clients with lower fund sizes, which means advisers are […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm