subject: Is this the perfect time to abolish Stamp Duty? [print this page] Is this the perfect time to abolish Stamp Duty?
According to an article by James Fitzsimons in the Sunday Independent, now is an ideal time to abolish Stamp Duty in order to encourage movement in the property sector. His argument is that when Capital Gains Tax was reduced to 20% in the late nineties, the tax take actually increased as a result. By reducing or abolishing Stamp Duty, the property market could be kick started again.
As Stamp Duty is one of the easiest taxes to collect, Revenue has no incentive to cut it. But the transactions that create Stamp Duty have all but disappeared. As a result, the tax take from Stamp Duty is down, as is VAT, Capital Gains Tax, Income Tax, and Corporation Tax. Something has to be done to revitalise property sales. Just as halving the rate of Capital Gains Tax increased the amount of tax collected, so too would a cut in Stamp Duty have a positive effect on the other taxes.
Stamp Duty is also a deterrant to moving house. People considering moving house will have to budget for paying out a large amount of money as Stamp Duty, and this additional cost would deter many people from making the move. If a person is forced to move as a result of unemployment/ redundancy, or for family reasons, they would have to pay a considerable amount of money in Stamp Duty which could seriously impact on their financial resources or, indeed, their ability to pay it.
The country is full of empty properties at various stages of completion. Many of these properties would make attractive investments and get cash circulating again. Just as removing Stamp Duty on share transactions leads to growth and development of capital markets, the same would apply to property. Given the state that the property market is in, what do we have to lose?
