Another report has called for improvements to the existing Stamp Duty regime, in order to substantially improve the number of housing transactions across England and Wales.
Alterations that came into force in April 2016 saw an additional 3% stamp duty surcharge added on buy-to-let and second property purchases over £125,000. This adds thousands of pounds to fees, particularly in London and the South East.
Investors can see Stamp Duty fees run into tens of thousands – making the existing housing crisis far worse.
Deterrent
Present rates of Stamp Duty are putting older buyers off downsizing and stopping more homes coming onto the market for those at the bottom of the housing ladder.
Research from the London School of Economics and the VATT Institute for Economic Research suggests that levels of moving could increase by a quarter if the tax was to be scrapped.
More calls for Stamp Duty to be amended
Professor Christian Hilber, co-author of the report, observed: ‘The key message is that stamp duty hampers mobility significantly, it create a mismatch and distortions in the housing market. Our analysis suggests that mobility would be 27% higher if stamp duty was abolished or replaced with an annual tax on the value of property.’
‘If you are a young family and you have an additional child, you’ll need an additional room, but the stamp duty is discouraging this kind of move because of the additional cost and lack of available homes to move into.’[1]
[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/8/cut-stamp-duty-to-free-up-mobility-says-report
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