The UK’s Council of Mortgage Lenders has urged the government to undertake a comprehensive review of taxation in the property sector, in order to iron out market distortions and make house purchases more affordable to first-time buyers.
In its pre-budget submission, released on Tuesday, the CML argues that British property taxes are among the highest in the world, and suggests that fundamental stamp duty reform is now needed, alongside the indexation of inheritance tax with house prices.
“Government appears to have no coherent policy,” observed CML's deputy director general Peter Williams, who also called for the removal of tax on premiums for mortgage insurance payments to promote a sustainable housing market.
“The threshold for stamp duty has not been raised since the Government was elected in 1997. Since then, the amount paid annually by home-owners has risen four-fold,” he added.
Lamenting the government’s record on stamp duty, Williams noted that three-quarters of first time buyers are now eligible to pay the levy. This contrasts sharply with 1997, when three quarters of first-time buyers fell below the stamp duty threshold.
“Without a change in approach, the tax burden on home-owners will continue to grow year after year,” Mr Williams warned.
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