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The Daily Telegraph has launched a campaign calling on Mr Hammond to address the issue of stamp duty in next week’s Autumn Statement. Click Here
In an article for the Telegraph today, Lord Lawson, Chancellor for Margaret Thatcher from 1983 to 1989, says the Treasury could learn from his time as Chancellor when he cut stamp duty and revenue from the tax increased.
Lord Lawson said, “Stamp Duty levels are crazy and must be reversed to stop a tax on mobility”.
Oxford Economics found the Treasury received £370 million less in stamp duty than the £700 million it expected following the changes made by George Osborne as Chancellor in 2014. It also reported this led to a steep decline in property sales and cost the economy nearly £1billion, because of a reduction in people selling homes or doing jobs such as removals or renovations. The changes to the stamp duty system have also led to 1,950 fewer properties worth more than £1 million being sold and the loss of 14,000 jobs.
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.
“Stamp duty as it is now is crazy. When I was chancellor, I increased the threshold at which stamp duty applies by six times and reduced the rate to 1 per cent. I then reduced it to 0.5 per cent.
“I realise here is a huge budget deficit, but now stamp duty is so high I think if it were reduced the yield to the Treasury might actually increase.”
However, Mark Alexander, founder of The Landlords Union disagreed with the timing of any cuts to Stamp Duty and said; “If it will increase revenue why not do it now? Deferral will just stall the market until next summer.
“Same with the tax on Mortgage Interest Relief on Landlords”
A HM Treasury dispute Oxford Economics figures and a Treasury spokesman 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.”
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