A Good Idea From a Politician? – THAT’S A FIRST…
It started like any normal Sunday morning. A skim read through the Sunday papers over a cup of coffee and a croissant.
I was however fascinated to read an article under the heading ‘New Ideas for the 21st Century’ in The Sunday Times with regards to stamp duty on residential property.
John Stevenson, MP for Carlisle, has put forward an idea which at the very least is thought provoking, and at the other extreme is possibly the best idea since the toaster.
In essence Mr Stevenson is proposing that stamp duty is reversed such that it is payable by sellers not buyers. What a genius idea!
Mr Stevenson believes that this would benefit the housing market and be tax neutral, and he highlights several immediate benefits. Firstly it would mean that no first time buyer in any part of the country would ever have to pay stamp duty on their first purchase. Whilst there is a temporary raising of the initial threshold in place at the moment, this concession expires on 24th March 2012.
Secondly it would mean that young families or couples trying to move up the property ladder would be paying stamp duty on the lower priced property they are selling, not on the more expensive property they are buying. Mr Stevenson believes that this would aid social mobility and be of assistance to aspiring families.
Finally, it is often the case that those selling property are in a better position to pay the tax than those who are buying. For example sellers who are downsizing can simply pay the tax out of the proceeds of their sale.
The only disadvantage I can see will be for lending institutions selling distressed properties who will experience a net reduction in their proceeds of sale, however if their property is now more attractive to buyers as the purchaser is not having to fund stamp duty, then perhaps the level of tax which the bank has to pay would be off-set by achieving a speedier sale in a more attractive market?
I must say it was a pleasant surprise to read something on a Sunday morning which, on the face of it, looks so patently obvious and surprisingly logical (for a politician…..!)
Richard can be reached on 0121 4559455 or email email@example.com.
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