Lib Dems predict £5bn stamp duty shortfall

The Treasury is heading for a £5bn stamp duty shortfall due to falling
property prices, new research by the Liberal Democrats has found.

Its central forecast, assuming a 15% fall in prices and a 50% decline in
transactions, would lead to a £5.7bn drop in revenues compared with the
Treasury’s forecast.

The Liberal Democrats’ ‘best case’ projection suggested prices would fall by
10% and transactions by 40%, resulting in a £4.5bn shortfall from the March
Budget projection of £9.5bn. It includes the impact of declining prices taking
properties into lower stamp duty bands.

The party’s ‘worst case’ estimate, based on a 20% fall in prices and a 60%
drop in transactions, would cost the Treasury £6.8bn.

‘Gordon Brown let Britain’s house party get out of control. Now Alistair
Darling has been left with a £5bn stamp duty hangover,’ said Liberal Democrat
Treasury Spokesperson, Lord Oakeshott.

The Liberal Democrats point out that the housing market ‘fell off a cliff’ in
April the following month after Budget Day.

‘Britain’s mortgage famine, after the wild feast led by Northern Rock, means
most house sales are now forced and at knock-down prices. In this horrible
market you only sell if you have to.

‘Commercial property transactions have halved this year and prices are down
15%.’

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