March 2008

DARLING'S DUTY TO BOOST MARKET

NAEA call for key reforms in Budget

THE NATIONAL Association of Estate Agents are calling on Chancellor of the Exchequer Alistair Darling to use this month’s Budget to ease the immediate problems facing people in the housing market.

Their three-fold appeal to Mr Darling covers a revision of Stamp Duty threshold, a new look at how Capital Gains Tax affects the buy-to-let market and the VAT-free ‘green’ policies.

“The Government needs to be aware that with inflation rising, consumers must have a helping hand,” said NAEA president Stewart Lilly.

With first-time buyers being priced out of the market at the bottom end, the NAEA want a revision of Stamp Duty and are proposing a new scale, starting at £200,000 rather than the current £125,000.

Their proposed new scale is:

Properties up to £200,000 — zero;
£200,000 to £300,000 — one per cent;
£300,000 to £450,000 — two per cent;
£450,000 to £1 million — three per cent;
£1 million to £2 million — four per cent;
£2 million and above — 4.5 per cent.

At the moment, one per cent Stamp Duty applies from £125,000 to £250,000, three per cent up to £500,000 and four per cent above that.

“We would like to see a scale of Stamp Duty that reflects the house price inflation in recent years,” said Mr Lilly.

Meanwhile, the NAEA are also concerned that buy-to-let investors are being left out in the cold on Capital Gains Tax.

They feel it should be revised to create a better incentive, enabling investors to buy and sell property more easily, creating fluidity and variety in the market.

As far as green policies are concerned, Mr Lilly said a lifting of VAT on eco products to promote energy efficiency and sustainability in the home has to be the way forward.