Is Stamp Duty preventing us from moving?
As an agent for over thirty years I have witnessed Stamp Duty, which you pay on property acquisition rise, rise & rise again. From 1% on all sales over £15000 in 1972 to the current regime of 1-7%, with the highest rate now applicable on all transactions over £2m.
With UK national average house prices now over £250k all average transactions occur SDLT of 3% .You therefore on average pay over £7500 tax just to move.
When average incomes & house prices were rapidly rising this easy to collect tax was as annoying as a summer midge. However when average household incomes are falling, house prices too being suppressed from the 2007 peak & mortgages requiring greater deposits this tax to move takes on a greater significance. When you also add in all the associated costs of moving, agents fees, lawyers fees, removal costs there is a compelling case that some vendors are now being held back & cannot actually afford to move.
I am increasingly of the opinion, like many others in this profession, that the tax bands need to catch up with the times & move up OR that the current rates are brought back to the easy to understand levels we saw in previous times, which made the market much more fluid. In the past every time you relocated you bought & sold, you therefore moved up & down the property ladder with ease & the burden of finding considerable amounts of cash to move was just not the major issue it has now become.
I hope HMRC can see the straight jacket this tax is becoming!
Philip Jackson is founding director of Maguire Jackson Estate Agents