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RICS calls for changes to Stamp Duty
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RICS calls for changes to Stamp Duty

15th July 2008

A report last week from the Royal Institute of Charted Surveyors has challenged the government to overhaul stamp duty land tax and make it a fairer system for 99% of purchasers in the UK. RICS believe that the changes would provide a means of boosting the housing market and the wider economy.

Currently, when the purchase price is under £125,000 no stamp duty is paid, property purchases between £125,001 and £250,000 incur stamp duty at 1% of the purchase price, the next band ends at £500,000 in which stamp duty is 3% and above this stamp duty is levied at 4%.

RICS proposal is to abolish the current system and replace it with a two tier tax system where stamp duty is charged at 2.5% for purchases between £150,000 and £250,000, with a 5%rate applying to purchases above £250,001.

Using this system everyone purchasing a property under £1 million would benefit from this change, which is 99% of purchasers.

For example; under the current system a person buying a home for £155,000 is liable for a stamp duty bill of £1,550 however this falls to only £125.00
under the proposed new system. Those buying at £255,000 would currently pay £7,650 in stamp duty but only £2,750 under the proposed new system.

RICS believes that these changes will make many more properties accessible to people, especially first time buyers who have been particularly hard hit
by the current market conditions.

Many industry bodies and experts including us have backed the RICS idea and believe it is up to central government to find a way to reduce the burden of
stamp duty on purchasers and help kick start the market.