Over 10,000 sign Charcol’s “Stamp on stamp duty” petition

Charcol, UK fees free mortgage broker, has gathered 10,400 signatories who agree that the current structure of stamp duty should be abolished in favour of a new system. The current way the tax is calculated is both hugely unfair and significantly distorts the market around the threshold levels. Charcol is calling on the chancellor to recognise the problems with the current structure in his budget this week.

Drew Wotherspoon of Charcol.co.uk comments: “Stamp duty really is a tax for nothing, and should be completely abolished, but that is an unrealistic expectation. Therefore, the system must be reformed to help make it fairer for many buyers. We have argued for years that stamp duty should mirror the way income tax is charged, with the rate of tax only payable on the amount over certain thresholds. We therefore put this suggestion to the UK’s mortgage population and they have resoundingly backed it. It is now time for the chancellor to do something about it.”

The current and suggested new structures on the petition are as follows:

Current Structure

A buyer wants to purchase a home priced at £250,000. At current rates they would pay 1% in stamp duty land tax for this property, i.e. £2,500. However, if competition for the property pushed the price up to £252,500 they would have to pay £7,575. Thus a 1% increase in the price of £2,500 results in a 203% increase in the tax to £5,075.

Suggested new structure

One suggestion would be for the new tax rates to be 0% on the first £200,000, 5% on the next £800,000 and 6% on anything above £1m. In this scenario the tax payable on a £500,000 purchase would be exactly the same (£15,000) and on a £1m purchase also exactly the same (£40,000). At all other prices below £1m the tax would be less than at present and above £1m, which would include many commercial properties, it would be more.

Wotherspoon continues, “The petition was launched in November of last year, so 2,500 signatories a month shows that there are strong feelings about the subject. We are hoping that the chancellor chooses to heed the countless calls for reform, but if he doesn’t then the petition will continue to grow and we will present it to him in due course.”

To sign the petition please visit charcol.co.uk/stamp-duty-petition.