The Chancellor's announcement that he freeze on thresholds for stamp duty on homes and business properties has brought an angry response from mortgage brokers who are branding it a stealth tax.
Stamp duty will remain at 1 per cent on properties priced over £60,000, rising to 3 per cent on properties over £250,000 and 4 per cent on properties at £500,001 and above.
Brokers say this is unfair as it does not take account of property inflation and they are calling for the bands to be adjusted each year in a similar way to income tax.
They claim that with substantial rises in house prices in the last year, the Chancellor is significantly increasing the tax take from stamp duty.
Halifax figures show the average house price rose to £127,040 in March from £102,468 at the same time last year.
The Council of Mortgage Lenders estimates that if the original bands had been index-linked when they were set in 1993, then all properties priced below £130,000 would be exempt from stamp duty.
Charcol senior technical manager Ray Boulger believes the system needs to be made fairer by adjusting the bands in line with house-price growth to encourage first-time buyers to step on the property ladder.
Wriglesworth Financial Consultancy managing director John Wriglesworth says: “The Chancellor should have at least raised the boundaries in line with inflation. He is at best being very deceptive. This is a stealth tax which should have been abolished years ago because it deters the transaction and is totally unfair on the buyers.”
London & Country mortgage specialist David Hollingworth says: “Stamp duty is here whether the buyer likes it or not. But I am glad that a band for properties over £1m was not introduced. The top end of the market does not need any more expense to cool it down.”