Estate Agents Call For Reinstatement Of Ftb Stamp Duty Break
The National Association of Estate Agents has called for the Stamp Duty break for first-time buyers to be reinstated.
The NAEA has upped the ante in its campaign for reform of the current Stamp Duty regime after discovering that it netted 5,960m for the Treasury coffers in 2010/11.
This was a 22% increase, up from a take of 4,885m in 2009/10, despite an ailing property market, says the NAEA.
The figures show SDLT receipt rose last year in all regions of the UK, apart from Northern Ireland, at a time when there was almost half the number of property transactions as pre-recession.
The highest increase in the revenue made from Stamp Duty was in the East Midlands, at 33.3% (to 240m) followed by 32% in Scotland (to 330m) and 27.7% in London (to 1,980m).
Wendy Evans-Scott, NAEA president, said: The Governments latest figures show it has received a windfall of 1bn on property transactions in the UK, at the same time as thousands of consumers are struggling to afford even the deposit for a home.
Clearly, the Chancellor can afford to reinstate the first-time buyer holiday and help boost this vital part of the market, instead of taking the 22% increase in income from this unfair tax.
The fact that SDLT is fluctuating regardless of the movement in the housing market shows it is an outdated tax that needs urgent reform.
* Separately, advisers should be aware of the outcome of a case involving Stamp Duty Land Tax and a buyers efforts to mitigate it by buying chattels separately.
The case, a victory for HMRC, proves that mistakenly identifying a fixture for a chattel can prove costly. It also shows that HMRC will scrutinise transactions at or near the threshold levels.
In Orsman v HMRC (2012 UKFTT227), Miss Orsman paid 250,000 for her home and 8,000 for the chattels, which included units that were not fixed to the walls of the garage but attached via battens. She was therefore liable to pay Stamp Duty of 2,500 because the property was at exactly the slab threshold.
Had she paid 250,001 for the property, she would have had to pay 7,500 in Stamp Duty.
Her purchase was successfully challenged by HMRC. But what exactly is a chattel? A chattel is a tangible, moveable asset such as carpets, curtains and loose white goods like fridges. A chattel is not a fixture such as fitted furniture or built-in white goods.
All HMRC needed to do was to prove that at least 1 of the chattels she had bought were in fact fixtures. A tribunal held that the garage units were in fact fixtures and not chattels, costing 800 and landing her with a SDLT bill of 7,524 on a purchase which was raised to 250,800.
One moral of this case is that buyers and indeed everyone involved in the transaction need to be very sure about what chattels are, if they are relying on chattels to keep their Stamp Duty costs down.
Lenders need to return to pricing for risk and there needs to be more 100%, cashback and sub-prime mortgage product availability if the mortgage market is to return to any sort of health.
John Wriglesworth, chairman of the Wriglesworth Consultancy, the PR firm specialising in the mortgage and housing markets, was speaking at the Mortgage Business Expo Manchester 2012.
by: Introducer Today
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