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Chancellor urged to axe Stamp Duty – ‘the worst tax we’ve got’

The Chancellor has been urged to scrap Stamp Duty Land Tax in the forthcoming Budget. Separately, a tax specialist has called for an end to landlord bashing.

The Adam Smith Institute says that axing Stamp Duty would help solve the housing crisis and deliver a £10bn boost to the economy.

The think tank said the tax is putting people off moving to new jobs and keeping households living in houses that are too large for their needs.

It said that such is the damage done by Stamp Duty, it is “almost as bad as setting fire to the money instead of raising it in tax”.

Instead, the Institute believes that Philip Hammond should raise Council Tax on the most expensive homes.

Sam Bowman of the Adam Smith Institute said: “Stamp Duty is the worst tax we’ve got.

“It is gumming up the housing market and keeping people trapped in the jobs that aren’t best for them.

“Scrapping it should be a no-brainer.”

Last year, Stamp Duty Land Tax raised a record £11.7bn, up from £10.7bn the year before.

Separately, an accountancy firm is calling for Hammond to make it more attractive for landlords to sell up.

Bishop Fleming’s head of tax Andrew Browne said the Government is taxing landlords out of the rental market through a cap on mortgage tax relief, a 3% Stamp Duty surcharge and the withdrawal of the “wear and tear” allowance. Landlords have also recently seen more stringent mortgage lending criteria introduced.

Browne said: “These recent changes are designed to hit private landlords, but what the Government has not done is to make it easier for those landlords to downsize their portfolios, or leave the sector completely, without incurring massive tax penalties.

“It has been all stick and no carrot from the Chancellor.

“Landlords face a Capital Gains Tax  bill of up to 28% on any gains they make on the selling of properties, without any relief for the time a property has been held, or for inflation.

“In the past, any gains would have been tapered depending on the length of ownership, and any increase in value purely through inflation would have been removed with an indexation allowance. Both these reliefs have been removed by successive governments, though indexation relief continues to be available to companies.

“The removal of taper and indexation reliefs has created a punitive retrospective tax on private landlords who may have bought their properties many decades ago. Inflationary pressures are outside the control of landlords, so it is unfair that they should not get some measure of relief from gains that have arisen simply through inflation”