CML calls for stamp duty reform
Currently the amount of UK stamp duty paid by English home-buyers accounts for more than 94% of the total paid.
Stamp duty is Scotland accounts for a mere 4% of the UK total whilst in Wales the figure is less than 2%.
In the latest CML News and Views the trade association said : “While we welcome the prospect of long-overdue reform in Scotland and Wales, which could remove some of the perverse and distorting effects of the tax, it is important to understand the modest scale of these reforms for the UK overall.
“The recent upturn in housing market activity will reinforce the growing contribution home-owners make to government revenue through tax on house purchases.
“Stamp duty paid by home-buyers already looks set to exceed the OBR’s original estimate of almost £6bn this year – and is predicted to grow by a further 50% in the next five years.”
But the CML warns that increasing revenue from stamp duty is exacerbating its perverse and market-distorting effects and that it could have serious implications on the wider market.
The CML said: “By deterring transactions, it reinforces inefficient use of the existing housing stock, and so compounds the problems caused by a chronic under-supply of housing in the UK.
“It is also in conflict with policy initiatives seeking to help borrowers address the high up-front costs of buying a home.
“As revenue from stamp duty grows, its contribution to the government’s fiscal position becomes more significant – while the case for reform grows stronger.
“There is now a real prospect of reform in Scotland and Wales to address some of the worst effects of stamp duty. But the effect for the UK as a whole will be modest.”