The managing director of Beresfords has called for a new 2% stamp duty land tax tier.
Paul Beresford believes a 2% tier between £250,000 and £375,000 could substantially increase the number of transactions.
He suggested that introducing such a tier would be consistent with the other 1% stamp duty increments below £1m and remove the anomaly of the biggest jump being at the bottom of the property scale where it triples from 1% to 3% at £250,000.
Mr Beresford said: “It would make a huge difference to ‘first time sellers’ in London and the South East who need more space to start a family and other areas of the UK where the market remains stagnant as this tax has to be funded up front in cash and is a real deterrent to moving.
“Thousands of buyers could benefit from these cost savings if they were implemented.
“The Government would see further economic benefits with an increase in levels of property related business and subsequent tax revenue collection, including higher stamp duty revenues from further up the property chain which would offset any subsequent shortfall in revenue in the lower band.
“Currently a purchase price of £250,000 has SDLT at 1% (£2,500) and £290,000 3% (£8700) which is plainly wrong. A 2% threshold on purchase price of £290,000 equals £5,800, saving nearly £3,000.”
Beresford’s calls for the new tier come as the TaxPayers Alliance launch a new “Stamp Out Stamp Duty” campaign which declares stamp duty a ‘punitive’ tax which is holding the UK’s families back.
The TaxPayers Alliance say that: “Stamp duty stops young people buying a home and starting a family, discourages elderly people from downsizing and stops people moving to new places for jobs.
“It is an unfair double tax which should be cut.”
To visit the campaigns website click here.
What do you think the answer is for stamp duty? Is drastic reform needed?