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TODAY'S OTHER NEWS

Stamp Duty must be cut says Boris Johnson’s ‘own’ magazine

The right wing political magazine that Boris Johnson used to edit has called on him to cut stamp duty.

The Spectator says that next week’s Budget will have to prepare Johnson’s new overall majority government to overcome its current £40 billion deficit, so warns that tax cuts will be few and far between. 

But it then adds: “If any tax is going to be cut it is likely to be Stamp Duty on property purchases, at least those made by owner-occupiers at the lower end of the market. No tax has been jacked up quite so much over the past two decades.”

The article’s author - well known political and property commentator Ross Clark - says that the recent flurry of SDLT increases mean that the buyer of a million pound property – who would have paid £10,000 in stamp duty in 2000 – will today pay no less than £43,750. 

And if the property is a second home or for investment the bill climbs to £73,750.

“No wonder that fewer of us want to move house, or to invest in property” he says, adding: ”The number of transactions in the UK has never recovered from the 2008/09 slump. From 1.7m sales in 2006/07, sales collapsed to 792,000 two years later. They have recovered, but only to 1.19m in 2018/19.”

Clark says this tax is a prime example of the Laffer Curve, which suggests that higher taxes do not always produce more revenue. Stamp duty receipts fell from £12.9 billion in 2017/18 to £11.9 billion in 2018/19.

“Few will be sorry, but one of the big victims of stamp duty has been the estate agency profession. It is a long time since the business of selling houses was the natural choice of a yuppie in search of a quick fortune” says Clark, who cites both the Countrywide/LSL merger talks and Purplebricks’ long-term rise and fall as evidence of the industry problems.

“While agents have long accused of jacking up house prices by encouraging gazumping and the like, they have no great interest in pushing prices up a few percent.  What really makes or breaks them is the volume of sales. If people aren’t moving, they are not going to make any money” he says. 

Clark says that a stamp duty cut would be a welcome help to the industry - but he adds that it is going to take even more than that to return to what he calls estate agency’s glory days.

  • adrian black

    Stamp tax is a very bad tax and it inhibits flow and economic activity, good taxes stimulate flow and economic activity. It really has to be reduced and in many cases stopped altogether

  • Phil Priest

    Your income is taxed, your property purchases are taxed on monies already taxed, only to be taxed again on the same asset if you then sell or pass to your estate..

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