The Chancellor’s decision to introduce a 7% Stamp Duty band on properties above £2 million will do nothing to help a struggling property market, according to local estate agents Mullucks Wells.
Director, William Wells, said: “This Government has become obsessed by the top end of the property market and they appear to see it as a cash cow. They are forgetting that moving house and buying in this price range is not obligatory and buyers can simply walk away from this additional charge. It is difficult to find an example where hugely increasing the cost of purchasing something increases the volume of activity or income. Perhaps we ought to even things up and have a premium tax on expensive cars, holidays and designer clothing and non-essential foodstuffs.
“In accepting that the Government has to do everything it can to raise revenue, it is difficult to understand why bringing the top rate of income tax down by 5% will cost virtually nothing and will provide incentive for entrepreneurs, but at the same time mugging buyers of the more expensive properties for 7% of the purchase price is regarded fair and reasonable.”
William Wells also pointed out that the issue of stamp duty may have been the cause of a sale falling through this week. He explained: “The buyers were hoping to move into a £1 million property – a move that would have injected a lot of money into the economy through the associated purchases of new carpets, furniture, decoration and so on. But the owner knew that they would also want to retire to the West Country in five years time, so they were faced with paying £50,000 in Stamp Duty today and who knows how much in a few years. On reflection they’ve decided that’s too big an ask and they’ve decided not to move. I suspect they won’t be the only people to take this view.
“I am certainly weary of consecutive Governments considering the property market a soft target. In life, we all know that in the long term if you are too greedy you get less not more. I think the Government needs to start buying industrial quantities of carrots and put away the lead-encrusted stick.”