Why stamp duty is the fairest tax of them all
If the leaks are to be believed, it seems that today will see more tinkering with stamp duty in the Budget due this afternoon.
The only problem is that it looks likely that the tax will be waived, at least in part for first time buyers with other rumours rife that investors may get a partial reprieve from the additional 3% levied recently on buyers purchasing a ‘spare property’ for letting or holidays.
I say it’s a problem, because I believe stamp duty is one of the fairest taxes that we have.
It’s true that as a property buyer I get caught with the additional 3% levy, meaning that most of my purchases generate £6000 to £10,000 for the Chancellor.
But that’s my problem. After all, the tax isn’t a surprise to me, it is factored in to the purchase costs along with survey fees, solicitors and everything else.
It’s my choice to buy or not. The same applies to landlords who should be buying with a long term plan, usually measured not in years but in decades. A few percent at the outset shouldn’t be make or break, and if it is, well perhaps they shouldn’t be buying at all.
Would I like to see the tax reduced or abolished later today? No.
Because it would only result in prices increasing as sellers mark up their homes well aware that buyers have an extra few percent up their sleeves.
And besides, where else would the £12bn in revenue come from? Petrol duty that would penalise everyone and as an added bonus lead to inflation? VAT increases? Personal tax rises?
I don’t think so.
Buying a second home for weekends or investment is a luxury and those that can afford to do so should be prepared to contribute their fair share.