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‘Harmful’ Stamp Duty too much of a cash cow to be reformed

by: Edward Murray
  • 23/01/2017
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‘Harmful’ Stamp Duty too much of a cash cow to be reformed
Lenders in the market have welcomed criticism of Stamp Duty from Christian Ulbrich, global chief executive of Jones Lang LaSalle, but have questioned whether it will be reformed any time soon.

Speaking to The Daily Telegraph, Ulbrich said Stamp Duty was making the UK’s housing crisis worse by distorting the market and harming long-term development. He felt that homebuyers were “paying for nothing” in a system that penalised landlords and second homeowners while doing little to address the lack of housing supply.

He said: “For long-term development, Stamp Duty is definitely harmful, because the Stamp Duty in itself does not create any value. It is an additional cost that makes development more unattractive and it has to be considered in the pricing.”

Bob Sturges, head of PR and communications at Fortwell Capital Limited, was in agreement. He said: “As a high-value lender operating in the prime and super-prime residential real estate space, we have seen first-hand the negative impact of George Osborne’s Stamp Duty increases on buying sentiment and activity.

“Targeted principally at overseas investors and second-home buyers, the former Chancellor’s fiscal interventions were a key factor in helping dampen a sector that was already showing signs of running out of steam.”

Sturgess said he had some sympathy with the government’s attempt to rebalance, or make fairer, aspects of the property market, but believed Stamp Duty had become a source of reliable and valuable revenue and one it was unlikely to surrender in the near future.

He concluded: “That builders, developers and buyers would welcome constructive reform of a tax device that has exceeded its original purpose is hardly likely to be in doubt. But we have to deal in realities, and it is difficult to see on the horizon any likely change to the status quo.”

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