RICS (the Royal Institute of Chartered Surveyors) is urging the Government to overhaul the housing tax system, including ending stamp duty on certain properties. By doing so, RICS say this could rebalance the UK housing market and reignite activity across all tenures.
A study from the RICS Residential Market Survey reveal that nearly half of people questioned suggest using tax incentives to encourage downsizing. They also believe that making changes to Stamp Duty Land Tax (SDLT) and Council Taxes would help more young people get on the property ladder.
RICS says that incentivising downsizing would bring more second hand properties to market. This would benefit the entire housing chain, and address the UK’s wider housing shortage.
They suggest that those downsizing from larger homes to move into smaller properties should be exempt from Stamp Duty.
Stamp Duty and Council Tax
The survey respondents also said scrapping SDLT would shift the burden away from the transactional phase and onto occupation, freeing up funds in the buying process.
Commenting on the survey results, Abdul Choudhury, RICS Policy Manager said:
“It is not surprising that our professionals feel that residential property taxation is out of kilter. 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 Council taxes, on the other hand are woefully out of date and are highly politicised”.
He added: “Given the state of the housing market, it would be prudent for the government to consider the cumulative impact current taxes are having on behaviour and determine what changes can create a more sustainable and vibrant property sector”.