The government should slash stamp duty to help boost housebuilding and encourage people to buy their own homes, a new report has stated.
According to reports, the levy has meant that the average buyer in England is landed with an average bill of £2,300 on top of the cost of their new property – with figures rising to more than £6,000 in the South East.
The think tank, the Centre for Policy Studies (CPS), branded stamp duty a “tax on mobility and aspiration” and has urged the government to raise the threshold from £125,000 to £500,000.
The report, drawn up by former No.10 housing adviser Alex Morton, proposed that a 4% levy be charged on properties valued between £500,000 and £1m, and 5% on anything higher.
Morton previously acted as head of housing at Policy Exchange and had a major influence on housing policy under David Cameron’s government.
Under Cameron’s leadership, the government passed laws seeking to force councils to sell off homes and charge social tenants more rent if they earned higher wages.
The Conservatives’ 2015 manifesto also set to extending the controversial Right To Buy to housing associations – as well as orchestrating other unpopular polices such as Pay To Stay.
Morton’s recent call for a stamp duty overhaul proposes “a far more appropriate rate” for the most valuable homes – taking nine out of 10 people who just want to buy a decent home for themselves and their family “out of the tax altogether”.
“While the Treasury are right to be fiscally focused, they need to take into account the fact that stamp duty on homes has an impact on transactions, which means cutting this tax is cheaper than expected,” he added.
Stamp duty rates have risen from a maximum of 1% in 1997 to up to 12% for the most expensive homes.
Cutting it by 1% increases house sales by around 20%, according to the report.
CPS director Robert Colvile said: “It’s no coincidence that stamp duty is one of the taxes that people hate the most.
“It’s a huge barrier to people living in the kind of homes that best fit their families and their lives.
“And as our report has shown, the current sky-high levels are doing more harm than good.
“We urge the government to take bold action to stamp down on stamp duty and get the property market moving again.”