Harris Lamb Blog – Stamp Duty
16th September, 2011.
Stamp Duty is the Most ‘Obviously Stupid Tax’!
By Tom Morley, Associate Director, Commercial Agency.
The Institute for Fiscal Studies came out with this observation on 13th September 2011, saying that Stamp Duty is inefficient and damaging and that by abolishing it in favour of a reformed Council Tax would be far more efficient with the Council Tax based on up to date property values (the Rateable Value and an enhanced payment via the Rates).
The review that was carried out cited the current system as “overly complex and frequently unfair” and sweeping changes are badly needed. They say a re-arranged property tax system could bring tens of billions of pounds in economic benefits following an overhaul.
From a property professional’s perspective I have to say the levels and differentials in Stamp Duty bands has significantly increased as a cost and factor in property decisions. Whilst not quite a driver in property decision making, it is nonetheless a significant factor. Not only have costs increased but complexity has also increased with the various bands of value given differing rates of tax plus the differences between residential and commercial properties. The Stamp Duty on leases is also significant and not always easy to work out.
I think that an abolition of Stamp Duty and a more locally enhanced tax based on the Rateable Value and Value Band of property would be far better and a potential catalyst for activity in the market at a time when we are looking for measures that help stimulate the market.
The report singled out stamp duty which will raise nearly £6billion this year, as discouraging people from moving and following an illogical structure, making it the most “obviously stupid” tax examined in the review, Paul Johnson, the IFS director, said. Other ideas in the 524-page report included the integration of income tax and National Insurance.
The time has come for a robust look at all our property taxes and how we shape a system that stimulates and encourages the way the market operates.
If you are thinking of relocating, selling or letting your commercial property, or if you just need some general advice, Tom would be eadger to speak with you. Call him on 0121 4559455 or email firstname.lastname@example.org.
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