Industry Experts Call For Changes To Stamp Duty Rules
As we have reported recently, the temporary extension of stamp duty on house purchases is due to finish at the end of December this year, meaning that many purchasers, particularly first time buyers will have to start paying the tax once again, in addition to the home owner loan arrangement fees, valuation fees, legal and other charges, all of which add to the cost of buying a house and applying for a loan.
Both the Council of Mortgage Lenders (CML) and the Royal Institute of Chartered Surveyors (RICS) have called on the Government to extend the current scheme and to make fundamental changes to the stamp duty system.
According to the CML, somewhere in the region of 132,500 new home owner loan transactions this year have managed to avoid paying stamp duty, due to the purchase price being below £175,000 and it claims that if the threshold returns to its previous level of just £125,000, this could have a seriously detrimental effect on the first time buyer housing and loan market, as it could be the one extra bill which puts people off applying for a loan in the first place.
This sentiment was shared by the National Association of Estate Agents (NAEA) who has seen a large increase in first time buyer loans and property sales over the course of the year.
RICS commented that the Government had a great opportunity to make some fundamental changes to what it described as an outdated tax system. Simon Rubinsohn of RICS said “A return to the status quo will benefit no one and as such we believe that rather than reverting back to the old structure for stamp duty, the imminent change provides an opportunity for the Government to introduce a wholesale restructuring of the tax. Specifically we favour moving from the current slab structure to a marginal system with no homebuyer paying anything on the first £150,000 of their new home.”
