Chancellor Gordon Brown’s Budget decision to increase stamp duty on property transactions came under fire this week from the building industry, which said it would campaign to reverse the changes.
The British Property Federation accused Brown of damaging the property industry following his decision to hike stamp duty by one percent age point to 3% in addition to a similar rise in his first Budget last July.
William McKee, chairman of the federation, said he believed the chancellor had developed a policy to raise stamp duty and the industry needed to lobby the Treasury to keep the tax pegged at 2% on properties valued at more than #500,000.
‘If this rise goes through and damages the industry, then things like inner city regeneration and overseas income from inward investment will be hit hard,’ he said.
John Whiting, Price Waterhouse’s head of personal tax, said many commercial property deals could founder if the rise goes through.
‘It is not that people pay 1% more tax every time because it also makes people think twice about the deal in the first place,’ he said.
Whiting said the Budget announcement was directed at affluent individuals selling expensive houses, but they make up only a small part of the industry.
McKee added: ‘It could have a massive impact on the value of property.
Small businesses that use property as collateral could find themselves in real trouble.’ He said other groups, such as the Investment Property Forum, had already said they would join the campaign.
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