Stamp duty 2017: Autumn Budget reforms urged as tax 'DRAGS on housing market'

September 30, 2017
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The Government collected £15.48million of stamp duty in the tax year to April 2017- with more than £8.5milion coming from residential transactions – a jump of 17 per cent from the previous year – official statistics this week revealed.

Although takings from home sales increased, transactions fell by eight per cent.

Stamp duty is in part responsible for the falling amount of moves and fuelling a slowdown in prices, according to critics.

In the brackets where buyers pay the most stamp duty, transactions are falling fastest.

Chancellor Philip Hammond has now been urged to make changes in the Autumn Statement in November.

It comes as house prices have slowed drastically over the past 12 months – and home values in London have fallen annually for the first time since 2009, according to Nationwide’s most recent figures.

The vast majority of stamp duty came from home sales in England, with London and the South East contributing 60 per cent per cent of the total takings.

Stamp duty was reformed at the end of 2014, with buyers at the top end now paying rates of up to 12 per cent.

Last year an extra stamp duty of three per cent was introduced for anyone buying a second home.

Nick Leeming, chairman of estate agent Jackson-Stops, said: “Prohibitive levels of stamp duty land tax (SDLT) have been a real drag on the UK property market over the last financial year.

“With buyers not prepared to pay an additional £153,750 in stamp duty on their two million pound primary residence, many are putting their moves on hold, thus causing transactions above £2million to fall by a whopping 17 per cent.

“Transactions in the under £1 million market also fell by 7.6 per cent.”

Only homes bought for less than £125,000 can avoid tax, with anything above this level, and up to £250,000 paying a rate of two per cent.

The average house price now stands at £210,982, according to Nationwide.

After £250,000 and up to £675,000, buyers pay tax at a rate of five per cent.

Mr Leeming said: “While the changes seen in December 2014 appeared to be good news for 98 per cent of home buyers at the time, the top end of the market has suffered and this, together with the additional three per cent tax surcharge, has had a knock-on effect on the rest of the market.

“Philip Hammond must view the property market through the eye of the homeowner and come up with a solution in the Autumn Budget.

“The Government has been too harsh on buyers in the £1million plus market, which in fact generates 30 per cent of all SDLT receipts.

“If they were to take steps to reform the impact stamp duty has on the top end of the market, even just marginally, they would not only see their revenue dramatically increase but it would also get the market moving again at all levels.”



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