Stamp Duty – the tax that discourages you from moving

 

           The Taxpayers Alliance has published an interesting study of Stamp Duty on homes. It brought more than £4,000 million to  the Treasury last year. More than one quarter of all homebuyers now have to pay £7500 or more in tax just to buy a home. There was good reporting of this tax on moving and the impact it is having, especially in London and the south east.

           The figures they published are  most interesting. Almost half of the Stamp Duty collected comes from the London boroughs. As you might expect, people in Westminster, Kensington and Chelsea and Wandsworth are the dominant payers.

             Wokingham and West Berkshire accounts for almost 1% of the total. More and more of my constituents have to pay the 3% or even 4% given the level of home prices. I think at the very least the government should only charge the higher rate on the sum above the threshold for that rate, not on  the whole transaction price.

           The other places which pay substantial Stamp Duty include Guildford, Windsor, Cornwall, Oxford, New Forest and St Albans.

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2 Comments

  1. Nick
    Posted August 8, 2013 at 3:20 pm | Permalink

    Should people have to borrow to pay tax?

    Just like predistribution, why not pretax? Lets tax people now on what they might earn in the future. Then when they do earn more, lets tax them again.

    Just like your tuition fees policy.

    1. You have to take the risk and borrow the money.
    2. Then if it works out you tax them penallly because they earn more.

    Heads the state wins, tails the student loses.

  2. alan jutson
    Posted August 9, 2013 at 12:01 pm | Permalink

    Ah yes Stamp Duty, a tax on aspiration.

    Want a better house, then you are going to pay the price, not even scaled rates for different bands, but the highest rate on the total value.

    Then the Chancellor wonders why people are not moving, and has to come up with a daft scheme to guarantee and underwrite high loan to value mortgages, which in part pay the tax element of the purchase price which he takes back in tax.

    Given that most people spend many thousands after the purchase of a property on carpets, curtains, furniture and improvements, all of which attract VAT @ 20% you would really think this would be good enough, on top of the VAT charged by Estate Agents and Solicitors fees.

    Even worse, want to move to a new location for better employment propects, or better Schools for the kids. no chance.

    Plus its all money out of the system which does not circulate, other than in inefficient Government spending and waste for the most part.

    I also see fiscal drag being used to increase the numbers of people paying Inheritance tax.
    I seem to remember a promise to raise this some years ago by the then Shadow Chancellor when in opposition.

    Seems its all take, take, take.

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    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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