Stamp Duty reform would speed sales says another leading Tory MP

The MP leading a new parliamentary committee on the housing market says a radical reform of tax would help more people move more rapidly, and encouage more house building.

Ben Everitt recently founded a new all-party parliamentary committee, looking at the Housing Market ad Housing Delivery. 

He’s told The Times: “I suspect there will have to be wider reform to stamp duty and a whole swathe of other taxation measures that relate to the property market and beyond. And I say ‘beyond’ because we can’t just swap one tax for another. It doesn’t work like that. It needs to be a whole suite of tax changes to get the balance right.” Everitt also urges 'property freeports' with tax incentives in locations to encourage targeted house building.

Everitt is not the first prominent Tory MP to call for a reform of this kind.

Just before the March Budget the former chairman of Hunters, Kevin Hollinrake - now a Conservative MP - called for stamp duty and council tax to new wrapped into one new property tax, based on updated housing valuations. He has also founded a new group, called the Property Research Group, consisting only of Tory MPs.

The renewed focus on stamp duty by MPs comes as the government introduces a new stamp duty surcharge, applying to non-UK residents who wish to purchase a property in England and Northern Ireland.

From the Easter weekend they have had to pay a two per cent stamp duty surcharge on residential property acquisitions and on rents on the grant of a new lease.

If buyers prove themselves to be ‘resident’ - that is, present in the UK for at least 183 days during any continuous 365-day period within two years from the date of transaction - they can obtain a stamp duty refund.

Mark Hayward, chief policy adviser at Propertymark, says of the new surcharge: “This is a significant change because for the first time in England and Northern Ireland, UK and non-UK purchasers are treated differently. Agents need to ensure they understand the rules and make buyers aware.”

Agents, naturally, have minimised the likely impact of the surcharge on high end markets such as prime central London.

Harry Buchanan, director at Jackson-Stops, says: “We anticipate many more overseas buyers will return to the market once international travel restrictions are lifted. We therefore expect demand to remain strong going forward, especially as the UK continues to roll out one of the world’s fastest vaccination programmes, which will boost economic activity in the coming months.

“We are already starting to see pent up demand from overseas buyers starting to build. Over the past two months, numbers of buyers visiting our website from the UAE have increased by 31 per cent, while website searches from Hong Kong have gone up 33 per cent.

“In particular, more buyers from Hong Kong are getting in touch following the UK’s offer of an easier path to citizenship for Hongkongers with British National (Overseas) passports. These buyers are specifically looking to become owner occupiers, and are particularly keen to be close to good schooling.

“The increasing demand we are seeing gives us a strong indication that interest in prime central London will continue to be high, especially for turn key properties that can double up as a lock and leave which we know tend to be most sought after by foreign buyers, as well as properties close to transport hubs.”