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Posted on August 3rd 2016 by admin-movingin

Developer calls on new Chancellor to bin ‘tax on moving’ Stamp Duty

Original Author: Rosalind Renshaw

There has been a new call for Chancellor Philip Hammond to bin Stamp Duty Land Tax.

This time it has come from a developer, Gus Zogolovitch, who specialises in building bespoke homes. He said the tax discourages people from moving at all, including potential downsizers who might otherwise be happy to move into smaller properties in their area.

He called for Capital Gains Tax to be introduced instead on the sale of main homes.

In an open letter, he said: “Stamp Duty is a potentially huge tax on transactions which discourages people to move out of their homes.

“Just as we need money to flow around the system to keep the economy buoyant, so we need people to keep moving to keep the housing market working, freeing up homes in areas of demand and creating demand in other areas.

“However, when moving can involve transaction costs of up to 13 or 14% at the top level of Stamp Duty plus other costs, that discourages moving.

“We’ve seen the impact of that transaction tax in the upper end of the housing market already with a marked slowdown in the more expensive properties.

“If we want the elderly to move out of their large homes and downsize into new homes, freeing up space for those younger, we need to make the transaction as cheap as possible for them.

“If we want families living near good schools to move on when their kids leave the school, we need to make that easy for them and cheap for them to do so.

“Is it fair that if I want to move two doors down the road from my London house I have to pay something like £175,000 to do so?”

He went on: “We should introduce Capital Gains Tax on all home profit sales over a certain level. Most of Europe levies Capital Gains Tax if you flip a property by holding it for less than five years.

“This is a much better option. We don’t want people buying a house, doing it up and selling it on, making a huge profit. I want to see a brake on house prices by progressively taxing gains. That will reduce the difference between the top and the bottom of the market over time.”

The TaxPayers Alliance has also called for the abolition of Stamp Duty Land Tax.