The mortgage industry has called for stamp duty to be completely overhauled, following the announcement that the coalition Government will review the effectiveness of raising stamp duty threshold for first-time buyers.
The Conservative manifesto pledged to make Labour’s two-year increase in the threshold to £250,000 for FTBs a permanent policy but the Liberal Democrat manifesto did not include the issue. Mortgage experts are asking for a shake-up in the way the tax is levied and warning the Chancellor not to introduce more punitive measures in his emergency Budget.
Chief executive of Email Mortgages, Michael White, says: “At a time when revenue is incredibly important to the exchequer, even the Conservatives, who you would ordinarily expect to arrange stamp duty in a fairer way, are working with their hands behind their back for the time being.
“If George Osborne suddenly announced he might be removing the stamp duty concession, it would be incredibly disappointing but not entirely surprising.”
Stroud &Swindon sales and marketing director Linda Will says the system should be linked to indices to combat artificial pricing.
She says: “There is no doubt that stamp duty thresholds create artificial pricing in the housing market. Ideally, there should be some sort of link with price indices – the house price index would be the obvious place.”
White says the system is outdated and that reconfiguring the way in which stamp duty is calculated would be the ideal outcome of the review.
He says: “The whole stamp duty system is antiquated and is not a fair process. If they are going to look at the first-time buyer aspect, great.
“If they are going to look at the whole stamp duty regime and how it is calculated, better still.”
MoneyQuest managing director Simon Jackson says: “I would reduce the bottom rate or raise the threshold.”