Stamp Duty on house sales has been described by the Association of Chartered Certified Accountants (ACCA) as unfair, out of date and in need of review.
Chas Roy-Chowdry, head of taxation at the ACCA, said: ‘The poorly-designed Stamp Duty system is creating distortions and financial difficulties for ordinary taxpayers buying and selling properties close to the boundary of a band. With the housing market showing signs of cooling, the Government should take the opportunity to introduce some equity into the system.’
The main criticism centres on the unfairness of duties for houses around the threshold level of £250,000. For those paying just above £250,000 price hikes of thousands are involved as they jump from the 1% rate to 3%.
‘The housing market has been buoyant over the last few years, increasing the number of people affected by the higher Stamp Duty rates on properties over £250,000. To make it fairer, the bands should operate in the same way as income tax rates so a house costing £290,000 would only be charged at the 3% rate for Stamp Duty on the difference,’ Roy-Chowdry said.
Bernard Clarke, communications manager at the Council of Mortgage Lenders, offers full support to the ACCA.
‘We agree with what the ACCA is saying,’ Clarke said. ‘We want the impact of Stamp Duty smoothed out so that higher rates are levied. For example, if a house is sold for £280,000, the 3% Stamp Duty should only be levied on the £30,000 above the threshold rate of £250,000 and then 1% levied on the remaining amount.’
