The property tax system needs a shake-up, many members of the Royal Institution of Chartered Surveyors (RICS) say.
Approximately 20% of RICS members are keen to see stamp duty either changed or scrapped altogether, with council tax used to make up the difference.
Such a move would incentivise people to downsize, RICS members believe, and get the property buying chain moving.
Central London, particularly, has seen sales market activity slow in the last few years, and an overhaul of the taxation system might help to stimulate that activity.
Abdul Choudhury, Policy Manager at RICS, said: “If we consider tax in terms of how they disincentivise certain behaviours, SDLT makes purchasing, moving and making more effective use of stock costly at a time when we need all these things. Council taxes, on the other hand are woefully out of date and are highly politicised.”
“We would therefore urge the Government to undertake a full-scale review of the SDLT system – starting with what it hopes to achieve from this tax in terms of revenue generation, market fluidity or another objective.”
A proportion of members also think that council tax could be used to prevent there being a shortfall, should stamp duty be scrapped.
RICS has described the property tax system as ‘outdated’ and desperately in need of reform. Such tax changes, members say, would boost activity.
It’s also been suggested that downsizers could be made exempt from paying stamp duty at all, as this would free up housing stock for families further down the property ladder.
With the Chancellor set to present the next Budget to Parliament later this month, it remains to be seen whether the Government will make the desired changes.
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