Osborne is wrong on stamp duty

by Ed Bowsher on 03 February 2010  |  1 comment
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George Osborne is focusing on the wrong problem when it comes to stamp duty.

George Osborne, the Tory Shadow Chancellor, wants to help first-time buyers. Sounds great, but his plan doesn't deal with the real problem.
 
Osborne plans to raise the threshold for stamp duty on property sales from £125,000 to £250,000. So, under this plan, if you bought a house for £240,000, you wouldn't have to pay any stamp duty.  I think this is a dumb move.
 
For starters, I see no need to boost the housing market by tax cuts. The best thing Osborne can do for first-time buyers is to pursue policies that keep a lid on prices. Then more homes will become affordable for young people.
 
But there's a bigger flaw. My big gripe with stamp duty is the 'slab system.'  As things stand, if you buy a home for £249,000, you pay 1% of the value of the home in stamp duty - £2490. But if you pay £251,000 for a home, you pay 3% - £7,530. This is clearly nonsense. Why don't you change this, George?