When the Government seeks to justify the taxes
it slaps on tobacco, we are told that it is part of an agenda to discourage
smoking, because it is bad for us and costs the NHS money. Likewise, part of
the rationale for slapping taxes on motorists and air travellers is to punish
us for behaviour which is bad for the environment.
So if politicians are to insist on using the tax
system to discourage behaviour which they believe is bad, then surely we can at
least rely on them to ensure that it is not discouraging behaviour which they
believe to be good, can’t we?
Alas not. For as long as I can remember,
politicians have – rightly – lauded the idea of home ownership: allowing
individuals and families to give themselves the security and stability of their
own roof over their heads. Yet there remains an insidious tax which is
making the dream of home ownership all the more distant for hundreds of
thousands, if not millions of people. I refer, of course to Stamp Duty.
New research published today by the TaxPayers’ Alliance lays bare just how punishing a
burden this tax now is for anyone wanting to buy a home, whether as a
first-time buyer, or in order to move from an existing home to accommodate a larger
family or to be nearer relatives or a new place of work.
Whilst the relatively few homes bought for less
than £125,000 attract no Stamp Duty, the rate is 1 per cent for those sold for
between £125,000 and £250,000, meaning that a home bought at the upper limit of
that band lands you with a bill for £2,500.
But the tax becomes increasingly punitive once
the price tag exceeds £250,000, with more and more people falling foul of the three
per cent band covering homes sold for between £250,001 and £500,000. Indeed,
because of the ‘slab rate’ nature of the tax, when the price of a home rises to
£250,001, you suddenly find yourself forced to write a cheque to the taxman for
an eye-watering £7,500. And you cannot borrow that as part of a mortgage – it
is a further upfront cost additional to the deposit and legal fees incurred
when you move.
Our research shows that more than a quarter of
home-buyers across England and Wales are now being hit by Stamp Duty at a rate
of three per cent or above, with that figure rising to 39 per cent in the South
East and an astounding 65 per cent across Greater London.
This is why we have launched our Stamp Out Stamp
Duty campaign: to persuade the politicians that it is time to ease the burden
on home-buyers, which is in fact something that George Osborne promised to do
back in 2007. Lest we forget, he told the Conservative Party Conference that he wanted, in particular, to abolish Stamp Duty for almost all first-time
buyers because “your dream is our dream too. Your aspiration is
our aspiration. We will get you out of tax and into your home.”
So please go to the campaign website,
where you can see how your area is affected by Stamp Duty and send a message to
your local MP asking them to support the campaign.
Stamp Duty on residential property raises in the
region of £4 billion per year – less than 1 per cent of total government
receipts – yet it is making home ownership an even more distant dream for so
many people. If ministers really want to help people get onto the property
ladder, they must act on their rhetoric and cut this unfair tax.