The National Association of Estate Agents has always pressed for a fairer system of stamp duty. But the chances of the Chancellor introducing an aggregated system (similar to income tax) appear to be more remote than ever.
In 2003-2004 an astonishing £3.59bn was raised on residential property according to latest figures from the Inland Revenue. Half of it came from London and the South East while in contrast just £50 million came from the North East. It has been reported that The Chancellor faces an overshoot in his Budget borrowing forecasts of £10bn in 2003-4 and up to £146bn in 2004/5. It is widely predicted that a hike stamp duty is a very real possibility.
Peter Bolton King, chief executive of the NAEA, said: "In a buoyant housing market Stamp Duty at its present levels might be sustainable. But the market is slowing and the Bank of England itself has predicted that house price inflation will hit zero next year.
"If the Chancellor should hike this tax it will seriously put a brake on the market and not raise the revenues he needs to raise. However, even if he keeps the tax at its present levels, that in effect will be a hike due to inflation.
"The graduations in the tax from 1% for houses worth £60,000 plus to 4% for houses over the £500,000 mark are now ridiculous and include more first time buyers than ever - a group the government say they want to encourage. The NAEA believes all first time buyers should be exempt from this duty.
“ It is also a tax on mobility as people will be hampered from relocating to new jobs because of the duty incurred.
"The unfairness of the tax has led people to exclude fixtures and fittings from the asking price thereby slipping under thresholds. But the government is now trying to close this loophole. If Gordon Brown was to introduce a fairer graduated structure to this tax whereby only the portion exceeding the relevant threshold would be liable for stamp duty, this would in some way reduce people's negative reaction to this lucrative tax."
