The Government has no plans to reform stamp duty in the near future.
Last week, housing minister Grant Shapps was asked at the Building Societies Association’s annual mortgage seminar if there were any plans to reform the slab system of stamp duty, with the thresholds set at £125,000, £250,000, £500,000 and £1m.
Critics of stamp duty argue the slab system distorts the market and should instead be based on a more incremental structure.
In the 2010 Budget, Chancellor Alistair Darling announced a stamp duty holiday for first-time buyers buying properties under £250,000. The holiday comes to an end on March 25, 2012, when buyers will have to pay stamp duty on homes valued over £125,000.
Shapps said: “Stamp duty, it is true to say, does have a big impact on the market. There is not anything immediately in the pipeline on this but I can say it is something I am always actively looking at and always speaking to my colleagues in the Government and the Treasury to see how this would best be done.”
Your Mortgage Decisions director Martin Wade says: “It is a very blunt system. As we have seen with the 50p tax, the tax becomes prohibitive and it restricts the market below it. And stamp duty is definitely having a subdued effect on the housing market. The Government is also missing a trick, it would bring in increased revenue if it was more graduated.”