Leading local estate agent Mullucks Wells has given a muted welcome to last week’s Budget, saying that the Chancellor’s changes to Stamp Duty didn’t go far enough.
Residential Director William Wells was responding to Philip Hammond’s announcement that Stamp Duty has been abolished for all first-time buyers of shared ownership properties up to £500,000.
Previously, to qualify for the stamp duty exemption given in 2017 to first-time buyers of homes priced up to £300,000, buyers of a shared-ownership property had to elect to be taxed on the full market value of the home (up to £500,000) rather than only the share they were buying.
William Wells said: “It’s good that the Chancellor has corrected an anomaly from his previous Budget, and we’re pleased to see that it’s being implemented retrospectively for any shared-ownership buyers since the first-time buyer exemption was introduced in November last year. In essence, all first-time buyers are to be treated in the same way from now on.
“However, Stamp Duty reform requires much more than a change affecting a single, select group of buyers. The truth is that all purchasers need to be freed from its stifling influence, so that they are no longer prevented from moving, and the market can prosper once again. So I’m sorry to say that last week’s changes amount to nothing more than tinkering at the edges of the tax.”
William Wells said that a cut in Stamp Duty for everyone would have a massive impact on people’s ability to move. He explained: “At the moment, we have the ridiculous situation where growing families are unable to move into larger properties, and older people cannot downsize from homes that are too big for them. A cut in Stamp Duty would unfreeze the property market and allow people to live in properties which better reflect their needs.”
William Wells also said that many people in the property world are perplexed by a Government which insists on raising Stamp Duty when the revenue it produces for the Treasury continues to fall. He added: “Why would the Conservative Government of 1993 think the correct top rate of Stamp Duty was 1%, when today it stands at an eye- watering twelve times that figure, plus an extra 3% if it’s a second home?
“What’s more, reducing Stamp Duty would be far more effective than providing small income tax cuts, because encouraging people to move house would also help associated business such as kitchen, bathroom and removal companies, as well as the host of DIY stores which are closing in droves across the country.”