Budget’s failure to cut stamp duty ‘a missed opportunity’

PHILIP HAMMOND’S Budget was a “missed opportunity” to cut stamp duty, which is discouraging homeowners from downsizing and “taxing social mobility”, according to a former chief secretary to the Treasury.

Greg Hands, who served in the Government for seven years until the summer, warned that the current regime had led to a “sharp decline” in sales of expensive properties, leaving less money for public services.

Writing in The Sunday Telegraph, the MP for Chelsea and Fulham, in west London, said households were simply “staying put” to avoid the tax. He backed this newspaper’s “Campaign for Capitalism”, which is calling for greater advocacy of the free market, warning that stamp duty was a major factor behind falling home ownership rates.

Separately, a YouGov poll by the Centre for Policy Studies (CPS) think tank reveals that 30 per cent of people believe they pay too much tax, compared to 48 per cent who said it was “about the right amount” and just 3 per cent who said they paid too little tax.

Mr Hands’s intervention comes after Mr Hammond used the Budget to abolish stamp duty for first-time buyers of shared ownership properties – when someone buys up to 75 per cent of a home then rents the rest of it. Last year he removed first-time buyers from the tax for properties up to £300,000.

Mr Hands welcomed the move, but added: “Nevertheless, punitive rates on properties above £937,500 have led to a sharp decline in the number of transactions.”

Many buyers were opting to rent rather than pay “years’ worth of rent on stamp duty”.

The CPS is expected to call for tax cuts as it announces a new policy programme, to be formally launched by Theresa May tomorrow.

A Treasury spokesman said: “We want to restore the dream of home ownership for a new generation. Our cut to stamp duty for first-time buyers will help over a million people get on to the housing ladder.

“There are lots of reasons why people do not downsize, including attachment to their homes.”