Lawson backs stamp duty cut
STAMP duty levels are “crazy” and must be reversed to stop a “tax on mobility”, Lord Lawson has said.
Lord Lawson, the former Conservative chancellor, said Philip Hammond should cut stamp duty in March’s Budget and increase other taxes to pay down the deficit. Research found that stamp duty reforms have slowed the housing market and raised half as much money as the Treasury predicted.
The Daily Telegraph has begun a campaign calling on Mr Hammond, the Chancellor, to address the issue in next week’s Autumn Statement. Lord Lawson said that the Treasury could learn from his time as Chancellor in the Eighties when he cut stamp duty – and revenue from the tax increased. Lord
Lawson said: “When I was chancellor I cut stamp duty substantially – and, as it happened, the revenue from the tax actually rose. But it would not be sensible to announce this in the Autumn Statement.
“It should be done in the 2017 Budget, as part of a package which will need to include increases in some other taxes, given the size of the budget deficit.
“One obvious candidate is a rise in the tax on diesel fuel to at least the level of the tax on petrol, if not higher.”
Lord Lawson said in an interview with Property Week magazine that high stamp duty rates were an “attack on mobility”, adding: “Stamp duty as it is now is crazy.”
The study by Oxford Economics said George Osborne’s changes to stamp duty in 2014 led to a steep decline in property sales and brought in £370 million less in stamp duty than the £700 million predicted. It also cost the economy nearly £1 billion due to a reduction in people selling homes or doing jobs such as removals or renovations, the study said.
The head of one of the UK’s biggest builders said that stamp duty should be moved from buyers to sellers in order to kick-start the housing market. Pete Redfern, the chief executive of Taylor Wimpey, described stamp duty as “a charge on moving house”, while Clive Fenton, chief executive of McCarthy & Stone, the retirement house builder, wrote to the Chancellor to call on the Government to scrap stamp duty for older people when downsizing to a smaller property.
A spokesman for HM Treasury said: “Our reforms mean that almost 800,000 ordinary house buyers have already seen their stamp duty bill cut or stay the same, while tax receipts from properties costing more than £937,000 have increased. The system is now fairer as stamp duty is levied incrementally rather than on the whole value of the property.”
Treasury sources said officials disputed Oxford Economics’ figures, insisting that they do not take into account “significant” regional variations.
A source added: “Their analysis is based on Land Registry data which does not take account of stamp duty reliefs, which can be substantial, and also has a different definition of residential versus non-residential property.”