IFAs are branding the Chancellor's increases in stamp duty on property a damp squib which will do nothing
to slow the runaway housing market.
The Chancellor raised stamp duty by 0.5 per cent to 4 per cent on property sales above £500,000 and 3 per cent on sales above £250,000.
Below the £250,000 threshold, the figure remains unchanged at 1 per cent where the value of the property is more than £60,000.
But IFAs say the increases, which will fall on the most upmarket properties, will only affect a tiny portion of the market. According to the Inland Revenue, out of a million transactions in 1999, only 5 per cent were over £250,000. The industry says the increases are simply an easy way for the Government to raise revenue.
But the industry has also raised fears that pension funds may be hit as they tend to invest in expensive property. Pension fund property holdings at the end of 1999 were worth £20bn, which could end up generating as much as £800m in stamp duty for the Government.
IFA John Charcol technical director Ray Boulger says: "It is a damp squib. The main impact for IFAs was in the run-up to the Budget."
IFA Chase de Vere Mortgage Management managing director Simon Tyler says: "It is a shame there were no curbs at the bottom end of the market where it was really needed."
Council of Mortgage Lenders director general Michael Coogan says: "Stamp duty is an easy tax to raise and increased revenue is likely to have been the Chancellor's real objective."
l The abolition of Miras on mortgages, which was confirmed in the Budget, will see the average homeowner £225 worse off this year, according to Opposition leader William Hague.