The National Association of Estate Agents (NAEA) has predicted a rise in stamp duty at the next budget and called for exemptions for first-time buyers (FTBs).
The NAEA has long campaigned for an aggregated system, where only the portion of house price exceeding the relevant threshold would be liable for duty. However, it noted the Chancellor faces a £10bn shortfall in his 2003-4 budget and that the chances of such a system being introduced are remote. The tax raised £3.59bn in the last year, with half coming from London and the South East.
Predicting a rise in the tax, Peter Bolton King, chief executive of the NAEA, said: “If the Chancellor should hike this tax it will seriously put a brake on the market and not raise the revenues he needs to raise. However, even if he keeps the tax at present levels, that in effect will be a hike due to inflation.”
Melfyn Williams, president of the NAEA, said: “To help the forlorn prospective FTB, the Government should consider abolishing stamp duty for first-time purchases. Stamp duty on any house purchase is the most unjust and inequitable tax existing in the UK today.”
Gordon Brown has also recently floated the idea of the introduction of capital gains tax on house sales. However, this was swiftly retracted in the face of general opposition from industry, press and public.
Other news from the NAEA saw its September figures show an improving housing market. Monthly sales were up from 14.7 sales per agent to 15.2 although the number of first-time buyers continues at a low level, at only 13.6% of sales.