Baleful consequences of stamp duty reduction
sir – According to Professor Les Mayhew of the Cass Business School (Business, June 3), older homeowners are contributing to the housing crisis by remaining in large properties. He proposes a reduction in stamp duty for “last-time buyers” – although it is not clear if this would be recalculated were the move not to be final.
Your report states that “first-time buyers find it difficult to get on the housing ladder and families find moving to larger homes expensive”. Surely the properties that older homeowners would need to buy, in order to downsize, are the very homes that those in the younger generation and first-time buyers wish to purchase.
Such a reform would thus not only negatively affect this market; it would also leave older homeowners with a pot of money that would gain little interest in any savings account – or be taxed heavily if given to beneficiaries.
Ursula Starkie
London SW8
sir – A key driver of a country’s economic performance is labour mobility, for which a healthy housing market is a prerequisite. As it stands, stamp duty is a major inhibitor in that respect – as evidenced by our own reluctance to downsize from a four-bedroom house. The Chancellor needs to recognise the upside of abolishing this tax.
House movers, given the right conditions, create a host of associated economic activities. These include house extensions, decorating and buying new furnishings. These create employment, income tax and VAT income for the Treasury. The loss in stamp duty is more than offset by such income streams, and jobs created.
Michael Carrivick
Wokingham, Berkshire
sir – The generous furlough scheme and the savings people have made in tax and the cost of travelling to work – together with a lack of opportunity for spending, except on necessities – mean that many are itching to relieve themselves of built-up cash.
To see the earliest recovery possible, the Government should devote resources to supporting the supply side of the economy.
JR Johnson
Dronfield, Derbyshire