Leading Tory MP Anthony Browne (main pic) has urged the government to ditch stamp duty for home buyers but increase the tax rate for investors.
The chair of the 1922 Backbench Treasury Committee says people buying homes to live in are over-taxed while those buying properties for other purposes are comparatively undertaxed – which reduces labour mobility and the number of property transactions.
“Most of the pernicious effects of stamp duty apply to people buying homes to live in – the arguments about labour mobility or downsizing or dreams of homeownership don’t apply if it is an investment property,” says Browne.
“In some parts of the country, second home ownership is so rampant that it causes massive damage to local economies and communities. Stamp duty should be a flat rate whatever the value of the property if people are buying it for any reason other than to live in.”
Higher rate
The MP helped to introduce the current 3% additional property premium for investors and says that last year, of the £10 billion raised by residential stamp duty, nearly half (£4.6 billion) came from property transactions incurring the higher rate.
“This rate could be increased further, and flat rated, with the revenues being used to cut stamp duty for people buying homes to live in,” he explains.
Browne adds that people currently don’t take jobs in other parts of the country because they can’t afford to move, while not moving also means that residential stamp duty does not raise the figure HMRC tables suggest.
“The Treasury does not take into account the loss of other taxes – primarily VAT on all the other things home buyers spend money on, such as building work and furniture.”
Read more about stamp duty.
