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Budget 2014: 12 predictions
by Michelle McGagh on Mar 17, 2014 at 09:10
Calls for reform to the ‘cliff-edge’ nature of stamp duty have been made for years, and as house prices have risen, these calls have grown louder.
Baker Tilly’s Bull predicted an uplift in the nil rate band threshold to £250,000, currently only properties under £125,000 do not attract the levy, while those priced £125,001 to £250,000 incur a tax of 1% of the purchase price.
‘Stamp duty [costs are] significant and often not considered by those buying at just above the threshold,’ he said. ‘The nil-rate band should, if changed to allow for price changes, be set at over £250,000.’
Bull added that the current stamp duty framework ‘distorts the market’ and called for a restructure, similar to that adopted in Scotland, that is tiered and more akin to income tax where a lower rate is paid up to a threshold and a higher rate paid on the remaining total.
Henry Knight, director of mortgage broker Springtide Capital, was even more optimistic and called for a stamp duty threshold increase for first-time buyers up to £600,000 – the maximum property purchase allowed under the government’s Help to Buy scheme.
‘While last years’ Funding for Lending and Help to Buy schemes went a long way to address the issue of helping struggling first-time buyers onto the property ladder, we still believe stamp duty is a significant obstacle to getting more homebuyers into their first home,’ he said.
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