Think tank calls for stamp duty to be scrapped

Think tank calls for stamp duty to be scrapped

The government is being urged to abolish stamp duty and replace it with a new levy, according to the Centre for Policy Studies.

The think tank argues that scrapping the stamp duty holiday would stimulate greater activity in the housing market.

Alternatively, if stamp duty is not to be abolished, the think says that the government should focus on permanently increasing the stamp duty threshold  to £500,000 for property sales in England and Northern Ireland

A report from the Centre for Policy Studies warns that the lessons of major crises, such as world wars, is that countries should slash taxes to encourage business investment.

Report author Jethro Elsden said: “A key lesson from post-war recovery is that interventionist, high-spending policies lead to lower and slower economic growth.

“Rather than maintaining big government after the pandemic, what we need is a smaller state which intervenes less – and to give the private sector the resources, support and certainty it needs to power the country back to growth.”

A spokesperson for the Treasury has said it will not speculate on tax ahead of fiscal events.

A recent survey found that more than half of conveyancers want stamp on property purchasers under £500,000 to be abolished.

A snap poll run by Index West Midlands revealed that 51.2% of conveyancers think scrapping stamp duty will be the best course of action.

But a fifth – 23.8% – still believe the value banding rates have a place and should return to normal once the holiday ends.

Around a quarter of conveyancers believe a gradual reintroduction of stamp duty is preferable to an overnight return to the stamp duty charges, with 14.5% wanting to see a phased reintroduction over two years, with 10.5% saying a shorter 12-month reintroduction timescale is ideal.

Around 1,000 professionals took part in the Index West Midlands poll.

“Without a fresh approach to Stamp Duty, the property purchases and sales will slowdown and eventually stall, which will be catastrophic for the property sector and the wider economy,” said Kate Bould, managing director of Index West Midlands.