Philip Hammond urged to SCRAP stamp duty tax on property purchases amid budget plan

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PHILIP HAMMONDGETTY

Philip Hammond see fit deliver his Budget on November 22

The Adam Smith Institute recently needed it the most damaging tax in the UK, so any action would be popular.

Stamp duty earth tax can add tens of thousands to the cost of buying a home and hinders the property furnish by making people reluctant to move.

It hits everybody from cash-strapped first-time consumers to older people looking to downsize and liberate cash for their retirement.

Even so, stamp duty is also a cash cow for HM Revenue & Customs (HMRC) net profit almost £12 billion in the 2016/17 tax year.

Can Hammond afford to act? 

DO YOUR DUTY

If you buy a residential property or land costing myriad than £125,000 in England, Wales and Northern Ireland, you have to pay tag duty.

In Scotland, buyers pay land and buildings transaction tax. Stamp fidelity rises on a sliding scale, so you pay 2 per cent on the portion of the property costing from £125,001 to £250,000, 5 per cent on the parcel out to £925,000, then 10 per cent to £1.5 million and 12 per cent on any value above that. This means that personage buying the average property in England and Wales costing £226,000 intent pay £2,020.

That is on top of all the other costs such as conveyancing, removals, mortgage payments, and so on. Somebody purchasing a £500,000 property would hand a whopping £15,000 hetero to HMRC.

This adds to the burden in London and the South-east, where £500,000 order only buy a twobedroom flat in Peckham.

Andy Somerville, director of Search Acumen, says the bring in of home ownership has departed the realm of reality for millions: “Market conditions are tax prices further and further up, which in turn means buyers are overlay higher stamp duty bills.”

For the truly wealthy, duty when buying a £2 million take in costs an astonishing £153,750, which explains why the prime central London property market has stalled since former Chancellor George Osborne hiked the top amount.

He also added a 3 per cent stamp duty surcharge on second feature purchases, aimed at buy-to-let investors and holiday home buyers.

This extended the up-front charge on a £300,000 property from £5,000 to £14,000. 

HOUSE PRICESGETTY

Kidney duty land tax can add tens of thousands to the cost of buying a home

UNAFFORDABLE

Housing transactions have plunged since the pecuniary crisis and Aegon pensions director Steven Cameron says tons see stamp duty as the root cause of our clogged up housing market.

He ventures it is unfair on first-time buyers scraping together a deposit and also daunts older people in large family homes from downsizing because they keep to pay the levy on their new purchase: “This in turn prevents growing species from moving up the ladder.”

Paul Smith, chief executive of Haart demesne agents, says the average house costs £11,000 more than a year ago and print duty is adding to the expense, which is stunting mobility: “Until the Command revises this regressive tax we cannot hope to solve the affordability calamity.”

Cutting this “stealth tax” would also give the housing customer base a new lease of life and boost the entire economy.

He adds: “The Autumn Budget is the survive chance for Prime Minister Theresa May and Philip Hammond to provide expressive help to young people and families struggling to get onto the ladder.”

LAPTOPGETTY

Repress duty hits everybody from cash-strapped first-time buyers to older living soul looking to downsize

STAMP IT OUT

Stamp duty revenues rose a impressive 10 per cent to an astonishing £11.8 billion in 2016/17 and to reduce it Hammond last will and testament have to either raise other taxes or cut Government spending to fix up for any shortfall.

It seems unlikely that he will scrap stamp fidelity altogether, but there has been talk of targeted cuts, possibly trained at fi rst-time buyers in London.

Hometrack insight director Richard Donnell implies first-time buyer numbers in the capital have fallen to new lows as places average £70,000: “If stamp duty for fi rst-time buyers in London was a fl at 1 per cent this would put away them £340 million a year.

TaxPayers’ Alliance chief CEO John O’Connell says tight planning regulations are making it harder to erect the homes needed to solve the housing shortage, while the Government is in truth driving up prices by subsidising buyers through its Help to Buy scheme: “A substitute alternatively of spending billions of taxpayers’ money on something that is increasing the bring in of home ownership, the Government should scrap stamp duty and liberalise the planning organized whole.”

Nick Leeming, chairman of estate agency Jackson-Stops, says retributive stamp duty rates on expensive properties backfire by cutting HMRC’s tax devour: “Latest figures show transactions above £2 million receive fallen by a whopping 17 per cent, with transactions in the under £1 million bazaar down 7.6 per cent.”

He says the levy is too harsh on buyers and Hammond has an enticement to act: “Steps to reform the impact of stamp duty on the top end of the market would dramatically wax HMRC’s revenue and get the market moving again at all levels.”

Radical function is required, but so far Hammond has shown himself to be a cautious Chancellor.

Will he do his task and stamp down on this hated charge?

We will find out on November 22.

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