Stamp duty tax 'needs change'

Date: 15th October 2009

Major reforms of the stamp duty tax are needed, the National Association of Estate Agents (NAEA) said.

The report identified the "slab" structure of the tax, with people paying higher rates if the value of the property they are buying passes pre-set thresholds, as a particular problem with the current system.

NAEA pointed out that these thresholds had not risen in line with property prices over recent years, meaning that many first-time buyers are effectively shut out of the market.

A poll conducted among members of the NAEA revealed that 86 per cent of agents believe stamp duty is "unfair".

Over four in five also agreed that effective government reforms of the system would give the property market a boost.

Peter Bolton-King, chief executive of the NAEA, said: "Stamp duty is a barrier to entry for many first-time buyers and is also prohibitive for those looking for a step up the property ladder.

"In addition, it unfairly penalises those investing in buy-to-let portfolios, who have to pay stamp duty on the bulk price when individual buy-to-let investors pay a lower rate on the individual unit price."

The government suspended stamp duty on homes worth £175,000 last year, as part of a bid to improve conditions in the housing market.

However, this temporary suspension runs out in January 2010, with the lower stamp duty threshold reverting to £125,000.