Experts Urge Stamp Duty Reform
06/08/2008
Property experts have called for the Government to overhaul the much-despised tax of stamp duty.
Under the law as it stands, people buying property have to pay stamp duty of 1% on properties worth £125,000 to £250,000; 3% for properties valued at £250,000 to £500,000; and 4% for properties over £500,000. In the current climate, buyers are concerned that their deposits are going to be eliminated by the combination of stamp duty and falling house prices.
Housing experts have, for many years, been recommending changes to stamp duty legislation.
Earlier this year the Royal Institution of Chartered Surveyors (RICS) proposed a structure for stamp duty that would ease the burden on buyers. RICS suggested a two-tier marginal tax system whereby the first £150,000 of a house price would be exempt from stamp duty. Above this value a 2.5% marginal rate would be charged on every pound up to £250,000. A 5% marginal rate would apply to every further pound.
According to RICS figures, anyone spending less than £1 million on their home - which is about 99% of buyers - would pay less stamp duty under the proposed scheme. A buyer purchasing a £250,000 property currently pays £7,500 in stamp duty. Under the RICS proposal they would pay just £2,500.
Under the law as it stands, people buying property have to pay stamp duty of 1% on properties worth £125,000 to £250,000; 3% for properties valued at £250,000 to £500,000; and 4% for properties over £500,000. In the current climate, buyers are concerned that their deposits are going to be eliminated by the combination of stamp duty and falling house prices.
Housing experts have, for many years, been recommending changes to stamp duty legislation.
Earlier this year the Royal Institution of Chartered Surveyors (RICS) proposed a structure for stamp duty that would ease the burden on buyers. RICS suggested a two-tier marginal tax system whereby the first £150,000 of a house price would be exempt from stamp duty. Above this value a 2.5% marginal rate would be charged on every pound up to £250,000. A 5% marginal rate would apply to every further pound.
According to RICS figures, anyone spending less than £1 million on their home - which is about 99% of buyers - would pay less stamp duty under the proposed scheme. A buyer purchasing a £250,000 property currently pays £7,500 in stamp duty. Under the RICS proposal they would pay just £2,500.
