A buying agent has given his backing to the prospect of a Stamp Duty and Inheritance Tax (IHT) cut during this week’s Autumn Statement.
Chancellor Jeremy Hunt is reported to be planning tax cuts in this week’s Autumn Statement, with Stamp Duty and IHT reforms on the agenda.
Liam Monaghan, managing director at London Central Portfolio (LCP), said momentum is needed in the property market after a long period of falling transaction volumes across England & Wales as well as limited price growth.
Only 538 houses in prime central London transacted over the past 12 months to August, this accounts for only 10 transactions a week, according to LCP research.
Monaghan said: “One way of kick starting this will be to encourage downsizers to leave their large family homes with a Stamp Duty incentive.
“Currently it is not economically viable for empty nesters to leave their large properties and owners simply hold onto their assets for longer than planned.
“A Stamp Duty cut would see a much-needed increase in stock and boost in transactions as large family homes, that are in high demand, become available for sale. This in turn will help create more stock for first and second-time buyers."
However, although a Stamp Duty holiday for downsizers would be “nice to have,” Monaghan said it’s not a long-term solution, adding: “Often with Stamp Duty holidays, transactions are simply brought forward and then we see a transaction lull once the holiday comes to an end.”
He suggested cutting Inheritance Tax not only would be a wise and popular move for the Conservatives just before a General Election, but it would also help the UK be more competitive on a global platform for overseas investment which will help boost the general UK economy.
Monaghan added: “It would also help build momentum in transaction volumes and price growth for the domestic market. This could ensure a kick start to the market, as a flat 40% tax for IHT will ensure lack of activity continues."