Mortgage Industry Calls For Stamp Duty Change
16 November 2009 / by Rachael Stiles
Property experts, including mortgage groups and home builders, are calling on the Government to extend the holiday on stamp duty or do away with it altogether to help the recovery of the housing market.
More mortgage and housing industry experts have joined the 1808 Coalition, set up to campaign for the modernisation of stamp duty, which now consists of the Association of Mortgage Intermediaries, Association of Residential Letting Agents, the Council of Mortgage Lenders, and others.
The current stamp duty holiday, which applies to properties less than £175,000, is due to expire at the beginning of 2010, despite opposition from the housing industry.
In a survey conducted by the National Association of Estate Agents it was found that 91 per cent of estate agents would like to see the holiday on stamp duty extended, and 86 per cent of those surveyed believe that the tax is unfair.
Peter Bolton-King, chief executive of the NAEA, calls stamp duty “an anachronistic tax,” which “is preventing a recovery in the housing sector – it limits market flexibility, creates regional inequality and its slab structure unfairly distorts the housing market. With the Pre Budget Report due soon, now is the time for the Government to take action.”
Ian Potter, operations manager of the Association of Residential Letting Agents, explained the effect that stamp duty has on landlords; not only does it prevent aspiring homeowners from getting on the property ladder, but it affects the whole property chain, he said. “For ARLA members, this means having to pay Stamp Duty on the bulk price of a portfolio, when individual buy-to-let investors pay a lower rate on the single unit price.”
The housing experts accuse stamp duty of creating an “unbalanced housing market”, of being a “damaging tax”, and “archaic and in desperate need of reform and modernisation.”
A “fairer and transparent system is needed that doesn’t discriminate against young and first time home buyers, and promotes an effective housing market,” said Adrian Coles, director general of the Building Societies Association.
Michael Coogan, director general of the CML, added: “We urge the government to announce a comprehensive and long-overdue review of Stamp Duty. Reform is needed of a tax that distorts the housing market.”
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