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Never look a gift horse in the mouth, the old saying goes

Not that Boris Johnson is a horse, but for those of you who care strongly about the detrimental effect the current Stamp Duty regime is having on the housing market, he is a gift.

His strident words (what other kind does Boris have?) in The Daily Telegraph recently calling on the Prime Minister to slash  ‘absurdly high’ Stamp Duty seems to have made a bit of a noise.

Housing, said Boris, “is the single biggest and most urgent crisis we face”.

We at the Family Building Society wholly echo his words. The plight of not only the First Time Buyer, but the second stepper and those stuck in a property that is either too big or unsuitable for their needs, could be so easily alleviated with a simple revisit to the Stamp Duty regime.

Boris’ words were then reinforced in the same organ by no less a light than the head of research for world renowned economic think-tank The Adam Smith Institute – Sam Dumitriu.

Stamp Duty is a risible tax and damaging tax - he said - but is easy to avoid. The way to avoid Stamp Duty is to stay put. And that is exactly what is happening and causing the damage.

People are stuck in houses that are too big, or too small, or too far from their families or their work because of the burden of Stamp Duty on the buyer. This is an issue on which the Family Building Society has campaigned long and hard.

In our latest report, ‘A tax too far? Monitoring the impact of Stamp Duty Land Tax’, SDLT receipts are starting to fall (and likely to continue to do so year on year) because the existing market is silted up.

We have long expressed concerns, as does Dumitriu, that the ‘reforms’ of the Stand Duty regime by George Osborne in 2015 is having the reverse effect to that which was intended by depressing house sales at both ends of the market.

Granny and Grandad can’t downsize and liberate money to their younger generation to get on the housing ladder because no-one wants to pay the brutal 10 per cent Stamp Duty on houses over £925,001 – that’s a pretty large chunk of the South-East of England and significant pockets of the South West and the North West.

Stamp Duty is the oldest tax left on the books – introduced by William and Mary in 1694 – as a duty on vellum, parchment and paper.

It’s as out of date as all of them.

By Steve McDowell

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