Reform of stamp duty is needed

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The dust has now settled after George Osborne’s budget and life in the housing market goes on.

The strong start to the year continues, first time buyers are out with the sunshine and demand for homes continues to exceed supply.

On average, the ratio of buyers to properties on the books is 12:1. So, once again, if you are thinking of selling this year, now is a good time to do it.

I still keep thinking about the Budget and my blood pressure rises when I think how the Chancellor could have helped buyers and sellers.

His failure to reform Stamp Duty is a massive missed opportunity to get more homes onto the market to meet demand and to help hard-pressed buyers.

True, the Government’s Help to Buy scheme has helped to restore confidence and its part extension from 2016 to 2020 is good.

But leaving the threshold at which buyers have to pay stamp duty at £125,000 is miserly in the face of improving prices and stagnant take home pay.

Stamp duty is punishing to buyers, especially when a house moves into a higher tax band which is applied to the whole price.

Unsurprisingly, many sellers feel forced to under value such properties in order to find buyers.

The Chancellor should have softened the blow. For example, when a £250,000 home is bought, stamp duty is 1% or £2,500.

If the house were £250,001 the rate is 3% or £7,500.

Ouch!

Haybrook is part of the UK’s largest independent estate agency.

We proposed that each seller should be able to deduct the value of stamp duty paid by their buyer from the stamp duty they pay on their next home. Such a stamp duty credit would make it easier for young families to move up, freeing up houses for first time buyers.

It would also provide an incentive for older homeowners to downsize (incurring no tax) improving the supply of larger family houses. How’s that for a good idea?

While the Treasury would lose a proportion of the £6.9 billion it raises in stamp duty this would be partially recouped by a rise in the number of transactions, increasing the VAT collected from increased purchases of white goods, fixtures and fittings and professional services. Now, here comes the sales pitch! As South Yorkshire’s largest independent estate agent, we have access to the latest online and social media marketing tools, plus traditional print advertising.

All offices are available by telephone 8am to 10pm, 7 days a week to support people through the buying and selling process, including providing legal, financial and surveying services.

Call 0845 481 0732 (8am to 10pm, 7 days) or search www.haybrook.com.

Rob Smith is divisional sales director of Haybrooks Estate Agents