Philip Hammond urged to axe stamp duty — and unleash a £10billion boost for Britain
CHANCELLOR Philip Hammond is being urged to axe the hated stamp duty — and unleash a £10billion boost for Britain.
A think tank called the levy on home-buying the “most damaging tax in the country” and claimed scrapping it would help young people get on the housing ladder.
The Adam Smith Institute said it was “gumming up” the housing market, stopping people from moving and forcing them into huge commutes to take up new jobs.
The tax makes £12billion a year, but abolishing it in the Budget would spark a £10billion economic boom and improve the housing market “at a stroke”, said a report.
Stamp duty was just one per cent for decades until Labour introduced a series of higher bands in 1997.
Regular hikes mean that buyers now pay five per cent on a house worth above £250,000, with a punishing 12 per cent levied on homes worth £1.5million or more.
Ben Southwood, the Institute’s head of research, said: “One of the best things about Philip Hammond as Chancellor is a resistance to eye-catching schemes that sound good but don’t make good economic sense.
"But stamp duty is so bad that scrapping it would be both eye-catching and good economic sense.”
Earlier this month, sources said the Chancellor was preparing a big cut in the duty just for young buyers struggling to get on to the property ladder.
It would be one of a series of “bold measures” to help people in their 20s and 30s.
Mr Southwood warned that a move targeted only at young people could backfire by making it more expensive to rent a home, and encouraging buyers to spend as much as possible on their first home to maximise the size of their tax cut.
But he told The Sun that abolishing stamp duty "across the board" would "really help" young househunters by boosting the market as a whole.
The think tank’s call came after a warning that any big giveaways in next month’s Budget, such as increasing public sector pay, could force the Chancellor to abandon his plans to balance the nation’s books by 2025.
In a report out today the Institute for Fiscal Studies warns that a slowdown in economic growth has slashed the Treasury’s war chest.
Thomas Pope, IFS economist said: “The first Budget of a new Parliament is often the best chance a Chancellor has to set out his stall.
“Mr Hammond, though, has been dealt a very tricky hand indeed. It looks like he will face a substantial deterioration in the projected state of the public finances.”
