You are here: Home - News -

Right-wing think-tank urges end to Stamp Duty

by: Cherry Reynard
  • 30/10/2017
  • 0
The government should abolish Stamp Duty Land Tax (SDLT), and replace it with a reformed council tax, according to a report from right-wing economic think-tank, the Adam Smith Institute.  

The institute said the UK’s £7.5trn property stock was currently taxed in “strange and inconsistent” ways. Residential council tax is based on a valuation system that hasn’t been updated since 1993; businesses pay at high rates; and homeowners pay rapidly escalating transactions taxes (SDLT), but private residences are part-exempted from inheritance tax and exempted from capital gains tax.

 

Remove SDLT, reform Council Tax

The Institute proposed a rationalisation of the UK’s property taxation system by abolishing SDLT altogether, and then rolling Council Tax, and business rates into one system, with everyone paying the same rate, set at roughly 20% of the equivalent rental income. It believes this could lead to large increases in revenue for the Exchequer over time.

The government collected £15.5bn in stamp duty in the tax year to April 2017, up 17% on the previous year with London and the South East contributing 60% of the total.  However, surveyors and estate agents have said increases to SDLT are creating inertia in the market and the government should consider reform.

 

Destroy wealth

The institute argued that economists view transaction taxes as damaging, meaning they destroy almost as much wealth as they create. It pointed to a survey by the Australian government, which found that Stamp Duty destroyed 75p of wealth for every £1 raised.

“Taxing housing transactions keeps people in houses that are either too small, too big, or too far away from jobs, which are especially harmful when the housing supply is so tight, as it is in the UK today,” the institute concluded.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.

Profiles

Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.

Marketwatch

Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.

Poll

Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Financial Services Compensation Scheme
BSA laments proposed FSCS changes as AMI celebrates

The Association of Mortgage Intermediaries (AMI) warmly welcomed plans to reform the Financial Services Compensation Scheme (FSCS) unveiled today, but...

Close