Brown urged to reform 'unfair' stamp duty
The government is under fire for its failure to 'index taxes and benefits fully in line with house prices' after latest figures revealed a dramatic rise in the numbers of first-time buyers paying stamp duty.
More than 60% of first-time buyers paid stamp duty in the first quarter of 2002 compared with only 23% almost five years ago, according to statistics from the Council of Mortgage Lenders.
Peter Williams, deputy director general of the CML said the upcoming Budget was an ‘important opportunity’ for government to reform the way the duty is levied.
‘Home-owners are making a growing contribution to government revenue because of the failure to increase tax allowances. Since 1997, the number of homes that would be liable for stamp duty has grown by millions,’ he added.
However it widely predicted that the chancellor will increase stamp duty. A spokesman for the Treasury said it was unable to comment ahead of next week’s Budget.
The CML said the threshold for stamp duty should be increased from £60,000 to £85,400 to match house price inflation since 1997. The average price of a house in England and Wales now stands at over £117,000.
It also called for increase in the threshold for inheritance tax to £306,000 and a cap on state support for mortgage interest payments to rise to £142,000.