Rics: Stamp duty should be reformed

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Rics: Stamp duty should be reformed

Tue 1st Jul 2008

Stamp duty land tax (SDLT) is "no longer fit for purpose" and should be reformed to ease the tax burden on first time buyers and those moving house, the Royal Institution of Chartered Surveyors (Rics) said today.

Noting the potential knock-on effects of house transactions dropping 40 per cent in one year, Rics' recommendations included considering scrapping stamp duty for first time buyers and worse-off pensioners.

It also says no homebuyer should pay SDLT on the first £150,000 of a new home, with a marginal rate of 2.5 per cent between £150,000 and £250,000 and five per cent after that.

There should also be an annual index for SDLT rates and the slab rate system replaced by a two-tier marginal rate system.

Rics says that these, and other, changes would increase transactions and, through additional SDLT payments, would reduce the cost of the reform to the government.

Last month, the Guardian reported a claim by the Liberal Democrats that falling house prices and decreasing transactions could lose the government over £6 billion in stamp duty, warning of a "budget black hole".

The party's Treasury spokesman Lord Oakeshott also said Britain had a "mortgage famine".

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