It’s time to rein in this tax on free­dom

The Week Middle East - - News - James Bartholomew The Daily Tele­graph

An eye-wa­ter­ing 1,100%. That’s how much the top rate of stamp duty has soared by over the past decade, says James Bartholomew. Be­tween 1984 and 1997, house sell­ers paid a nom­i­nal levy of just 1%, but to­day the most ex­pen­sive prop­er­ties (those priced at more than £1.5m) face a 12% tax, and the rate for even £250,000 houses has risen five­fold to 5%. This has brought in cash for the Trea­sury, but at a great cost to the coun­try. An aca­demic study pub­lished last week con­firmed what many peo­ple al­ready knew, con­clud­ing that these pe­nal trans­fer taxes are an “in­ef­fi­cient way of col­lect­ing tax rev­enue” and “likely have very sub­stan­tial detri­men­tal ef­fects on the func­tion­ing of the hous­ing mar­ket”. The study found that peo­ple across all stamp duty bands were mov­ing less of­ten in or­der to avoid the levy. Peo­ple who wanted to down­size, or to re­lo­cate for per­sonal or job rea­sons, were opt­ing to stay put. Stamp duty is there­fore act­ing as a “tax on free­dom”. Min­is­ters should cut the rate to 1% again. It might hit the Ex­che­quer, but then, so will HS2 – and it would also al­low peo­ple “to live hap­pier, more flex­i­ble lives”.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.