Stamp duty land tax is unfair and detrimentally affects first-time buyers. This situation is desperately in need of reform, so says the Royal Institution of Chartered Surveyors today.
95% of chartered surveyor estate agents consider stamp duty "in urgent need of review".
Presently all properties under £120,000 are exempt from stamp duty, with people buying a home worth £120,000-£249,999 pay tax worth 1% of the total value of the house.
This tax then increases, with people charged 3% of the value of the property for purchases between £250,000 and £500,000, and jumps further to 4% on the value of all properties worth more than that.
Surveyors are concerned about the category approach of the tax, which has led to tax avoidance, house price clustering, impeded mobility, and problems for first-time buyers.
The 0% threshold for this tax, £120,000, is low given that the average UK house price is £185,788, according to Rics.
Rics proposes that the tax is paid on the amount above a certain level, not the entire transaction value.
They also recommend the lower threshold should be raised to £150,000 to help first-time buyers, and that a marginal rate of 5.5 per cent for homes over £1 million is added, to make sure the same amount of money is generated from the tax.
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Calls to End Unfair Stamp Duty
Tue, 07 Mar 2006
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