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Treasury given pause for thought on stamp duty

Outlook

James Moore
Wednesday 10 February 2016 02:34 GMT
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A new banding system for stamp duty has been introduced
A new banding system for stamp duty has been introduced (Getty)

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You’d think Steve Morgan would be happy. The founder of housebuilder Redrow has just unveiled a bravura set of results. Revenues, completions, profits, and the margin on each property sold – they’re all up.

So why is he acting like a bird of ill omen? It’s because of stamp duty, and in particular the reforms that have raised it on sales of pricier properties. This, he says, has “killed the central London property market”.

Given the previous heat in that market, some might argue it could do with a bit of killing, and it’s hard to feel too much sympathy for those affected. The duty may impose a considerable burden, but it’s on people who can afford to spend £1m-plus on a place to live. They ought to be able to take it on the chin.

However, it appears to have reached a level where it is having a big impact on their behaviour, to the detriment of the Exchequer. The increases may have become counter-productive in terms of raising revenue. For that reason, the Treasury would be wise to heed Mr Morgan’s call for a re-think.

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