Alex Morton, the Head of Policy at the Centre for Policy Studies think tank argues in the report ‘Stamping Down’, that stamp duty has distorted the market to such an extent that the costs of cutting it are far lower than generally realised.
The report quotes evidence that shows that a 1% cut in stamp duty rates increases housing transactions by around 20%. It also shows that more housing transactions lead to more homes being built, as developers respond to market incentives and the fact that more people are in the market to buy new homes which makes it easier to sell new build properties.
The report carries on to say that ‘if transactions were returned to their historic level through other reforms, the boost from stamp duty on top of this would be high, to the point where raising the SDLT threshold could be nearly cost-neutral if accompanied by a 3% surcharge on properties purchased by non-resident overseas buyers – i.e. as investments rather than homes to live in’.
Robert
Colvile, Director of the Centre for Policy Studies, said: “It’s no coincidence that stamp duty is
one of the taxes that people hate the most. It’s a huge barrier to people
living in the kind of homes that best fit their families and their lives. And
as our report has shown, the current sky-high levels are doing more harm than
good.
“We urge the Government to take bold action to stamp down on stamp duty, and
get the property market moving again.”
