Stamp Duty: Put up or shut up, Darling!

Monday, 11th August 2008 12:28 - by Resident IFA

Why oh why, when you are in the second most contentious and critiqued role in this (failing) Labour Government, would you go and throw out a life-line to house-buyers and then refuse to elucidate further on it?!! The UK housing market is so delicate at the moment that an indication that Stamp Duty may be suspended, withdrawn, or made easier to pay by instalments, will naturally have an effect. Alistair Darling, what were you thinking?! On BBC Radio 4’s Today programme he said: “I am looking at a number of measures and I am not going to be drawn on that today because we have not concluded what exactly we need to do. It is helping people that is important. I want to look at a range of options that will help people.” This actually helps no-one, least of all those currently in the middle of a property purchase. As an example, I saw a feature on tv news about this very subject last week. They interviewed a ‘typical’ buyer – buying a £500,000+ house…never mind. Anyway, the point was that he had a date set for the completion of his purchase, yet cancelled this until the esteemed Mr.Darling & Co. comment further as to their Stamp Duty intentions. This is highly understandable, the buyer in question likely to save a heady £30,000 if he purchased at £750,000 and Stamp Duy was to be abolished. The tv news programme also interviewed an Estate Agent, who quoted that among just a few branches of his company, four buyers had already pulled out or stalled their purchase transactions as a result of the confusion caused by Mr.Darling’s wishy-washy pronouncements. Of course, the Government will not abolish Stamp Duty as it is such a good money-spinner, raising a record £6.4bn in the last available figures (for the 2006/2007 tax-year), up 40% from the previous year (Source: hbosplc.com). I have a cracking idea! Don’t abolish it, postpone it, help First-time buyers by abolishing it just for them, or make it a staggered payment. Instead, have a tiered Stamp Duty level starting at £100,000 and 0.25%, increasing by 0.25% for each £100,000 of purchase price. This way, someone purchasing at £200,000 would pay £500 (compared to £2,000/1% now) and £6,250 or 1.25% at £500,000 (compared to £20,000/4% now). Just a thought… This might help everyone involved, still raising revenue for HMRC and the Government, yet giving house-buyers a break, hopefully re-invigorating the housing market to some degree. When you also learn that the Building Societies Association today provided figures for mortgage lending in June, showing mortgage repayments outstripped lending by £700m – lending not even being negative in the (property-led) recession of the 1990’s – any comfort or clarification, rather than hindrance or confusion, Mr.Darling can lend at this time will be appreciated. Until next time…