Monday 27 April 2015

The Stamp of Approval

Fraser Nelson writes:

I hate to admit it, but Ed Miliband has a point about the need for raising the stamp duty threshold to £300,000 for first-time buyers. (The FT has the story tomorrow, and Sky News has the £300k detail).

The tax was invented so the government gets a slice of the more expensive housing transactions – at least that was the idea when the £250k threshold was introduced.

But this £250k threshold has stayed the same while house values shot up: pretty soon, the average UK house will cost £250k. 

And as a result of this, stamp duty revenues were set to soar – a way for Osborne to cash in on the asset bubble that he is overseeing.

Stamp duty cost homebuyers £9.5bn last year – failure to adjust the thresholds threatens to send this soaring to £18bn by 2019/20.

A massive silent tax hike from Osborne, done through the anaesthetic of fiscal drag.

That’s not right: buying your first home is hard enough, without the government jacking up the price even further.

So lifting the threshold in line with inflation is fair.

I haven’t seen when Miliband proposes to bring in the £300k cap but it may be 2020 or something – ie, his policy would have the same effect as adjusting the stamp duty threshold for house price inflation.

I know that an election is a few days away, and Conservatives will denounce this policy as madness because it comes from the Labour Party.

But it’s a sensible idea, and one George Osborne should have come up with in his depressingly empty Budget.

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