Government should end stamp duty on certain properties according to RICS
New figures show that nearly half of respondents to the RICS Residential Market Survey suggest using tax incentives to encourage downsizing, while making changes to Stamp Duty and Council Tax would help thousands more young people realise their dream of owning their own home.
A housing tax overhaul including ending stamp duty on certain properties could rebalance the UK housing market and reignite activity across all tenures according to RICS.
Abdul Choudhury, RICS Policy Manager commented:
“It is not surprising that our professionals feel that residential property taxation is out of kilter. If we consider tax in terms of how they disincentivise certain behaviours, SDLT makes purchasing, moving and making more effective use of stock costly at a time when we need all these things. Council taxes, on the other hand are woefully out of date and are highly politicised.
“Any changes to the system of tax should be considered carefully, as they would have disruptive consequences that could negatively impact activity. Providing an SDLT exemption for downsizers could free up larger, underused properties; but will likely provide them with a market advantage over other participants. Similarly, replacing SDLT with council could increase house buying and selling activity; but increase day-to-day living costs at a time when occupiers are already facing higher bills.
“However, given the state of the housing market, it would be prudent for the government to consider the cumulative impact current taxes are having on behaviour and determine what changes can create a more sustainable and vibrant property sector. We would therefore urge the Government to undertake a full-scale review of the SDLT system – starting with what it hopes to achieve from this tax in terms of revenue generation, market fluidity or another objective.
“It is imperative that the Government recognises that markets need time to adjust to alterations to tax regimes as inconsistency is not conducive to the stable market that buyers and investors need. SDLT has seen a number of changes in recent years, with the market struggling to adapt to one change before another is introduced.
“Given that RICS professionals are front and centre of the residential market, we will be developing a critique of the housing buying tax options available to Government in the near future.”
Read the RICS surevey report 19th September 2018 in full click here
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