Unfair stamp duty hits homeowners’ pockets
ACCA says that with house prices at an historical high, the existing bands for stamp duty are out of date and need to be reviewed.
The Association points out that in today’s climate of inflated property prices, it is no longer unusual for houses to be worth in excess of £250,000. Yet the stamp duty regime is such that a purchaser buying a house costing £250,000 pays at a rate of 1 per cent while the charge for a house which costs £250,001 is 3 per cent on the full cost. The £1 increase, in the example, results in a disproportionate £5,000 extra tax charge.
Chas Roy-Chowdhury, head of taxation, at ACCA, said: “The housing market has been buoyant over the last few years, increasing the number of people affected by the higher stamp duty rates on properties over £250,000. To make it fairer, the bands should operate in the same way as costing income tax rates, so that a house costing £290,000 would only be charged at the 3 per cent rate for stamp duty on the difference, £40,000.
“The poorly designed stamp duty system is creating distortions and financial difficulties for ordinary taxpayers who are buying and selling properties close to the boundary of a band. With the housing market showing signs of cooling, the Government should take the opportunity now to introduce some equity into the system.”