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Duty to Reform

The LibDems want a fairer system of stamp duty and changes for inheritance tax, says housing spokesman Dan Rogerson

It would seem that supporting the first-time buyer is all the rage. What would your party do to address the issues faced by first-time buyers?

Rogerson:

At a local level, the Liberal Democrats are already delivering innovative schemes which enable many people to afford the kind of homes which, on the open market, are simply unobtainable.

One example is in South Shropshire where the district council has a system of equity mortgages for buyers which allows the council to retain a share in the house. They are therefore able to keep a good proportion of their housing stock as affordable and are leading the way in providing local homes for local people.

The Conservative proposal for a right to buy received mixed feedback when it was announced in August. Where do the LibDems stand on right to buy?

Rogerson:

The Liberal Democrats are in favour of the right to buy but there is clearly a problem for social housing when between 1997 and 2005 only 140,202 new social homes were built in England and Wales, yet in the same period 449,809 homes were sold off under right to buy in England alone.

This has produced a crisis in social housing because councils have not had the power to reinvest the proceeds from sales directly back into their housing programmes.

We share Shelter’s concerns that an extended right-to-buy scheme will exacerbate the problems. The Conservatives have acknowledged that we do need more social housing but have not offered any answers as to how they plan to provide enough to replace that which is lost through right to buy.

We would allow councils to decide the appropriate level of right-to-buy discounts for their area and insist that funding for council is put on the same footing as the funding that housing associations and registered social landlords currently receive.

At the other end of the spectrum, there has been no upward revision of the stamp duty threshold at higher levels. How would the LibDems tackle this?

Rogerson:

We have suggested shifting from a slab system of stamp duty to a progressive system which would reduce stamp duty in the £250,000 to £500,000 band but increase it for very high value property, along the lines recommended by the Council of Mortgage Lenders.

A system whereby a house purchased for £251,000 attracts £7,530 of stamp duty and yet a property that sells for £249,000 attracts only £2490 is clearly ridiculous. It serves only to encourage avoidance and create distortions.

The Chancellor must focus on creating a fairer and simpler alternative that is proportionate to a house’s value.

Another key source of tax revenue is inheritance tax. As house prices have rocketed, the value of the average home is now close to the IHT threshold. Do you believe the nil-rate band for IHT should be raised to reflect this increase?

Rogerson:

We are looking further and carefully at IHT reform options. Lifting thresholds or a lower (20 per cent) first band are worth considering but any reform has to find other ways of realising the revenue.

Our current, tentative, preference is to tax accessions rather than death which would reduce the burden where there is more than one recipient.

The Government is testing Hips to see if it can speed up the buying process and the DCLG has set up an ombudsman for estate agents. Do you believe estate agents should fall under the jurisdiction of the City watchdog? Is enough being done to improve the quality of the housebuying process?

Rogerson:

There are a number of issues to be addressed in improving the transparency, efficiency and speed of conveyancing in England and Wales.

There may be individual instances where estate agents have contributed significantly to delays but the estate agent industry as a whole is not the source of all the problems and delays in the housebuying process.

However, all estate agents should be providing the highest possible service to their clients and there was a bill included in the Queen’s Speech on regulating them.

The Lib Dems look forward to seeing what the Government proposes. There needs to be a clear code of conduct, either voluntary, or if there is evidence of non-compliance, statutory, and the ombudsman scheme should reflect that.

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