'Set FIRE to money instead' Fury over stamp duty amid calls for worst tax to be scrapped

Posted on Oct 30 2017 - 4:23am by admin

The £13billion-a-year levy paid by house and business promises buyers “gums up” the housing market, traps people in unsuitable dwellings and jobs and puts red tape burdens on the state, said the free market Adam Smith Institute.

It urged Chancellor Philip Hammond in next month’s Budget to scrap the tax and replace the lost revenue with a simpler and fairer system of property tax.

That could start with reforms to council tax to properly tax the most expensive homes and end with rolling council tax and business rates into one property levy and everyone paying the same rate.

Sam Bowman, executive director of the Institute, added: “Stamp duty is the worst tax we’ve got – almost as bad as setting fire to the money instead of raising it in tax.

“The reason is that Britain’s productivity problem is in large part a mobility problem.

“People cannot move to where the best jobs for them are because the houses aren’t being built, and that’s made even worse by stamp duty keeping older people in family homes that are too large for them.

“Stamp duty is gumming up the housing market and keeping people trapped in the jobs that aren’t best for them.

“Scrapping it should be a no-brainer for a government looking for a bold, affordable way to take back control of the agenda in British politics.”

Report author Ben Southwood commented: “Almost any way of clawing back the money will do less damage than stamp duty does – it’s worse than council tax, income tax, VAT, and even corporation tax.

“Stamp duty has had its day and should be consigned to the dustbin of history.”

The tax is paid by buyers of private homes worth more than £125,000, and by purchasers of commercial properties sold for £150,000 or more, with rates rising on chunks of the price above a series of thresholds.

The Institute said the duty raised an estimated £12.9billion in 2016-17 but research suggested its damaging effects could have cost the economy as much as £10billion.

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