All rates of Stamp Duty should be halved immediately and then scrapped altogether, while the 3% surcharge on buy-to-let properties and second homes should be ditched without delay.
The calls come from the influential TaxPayers’ Alliance, which is also demanding that the Government immediately bin its forthcoming cap on the amount of mortgage relief landlords can set against tax.
The TaxPayers’ Alliance this morning issued a report which pulls no punches, describing recent tweaks to the tax system as “gimmicky”.
The Alliance said that the Government must undertake “real reform” to solve the housing crisis.
It tore into previous administrations for “tinkering around the edges”, which had only worsened the situation and driven up prices.
It said that taxing landlords was in reality taxing tenants, because rents would rise.
In calling for first the halving and then the abolition of all Stamp Duty Land Tax, it described this as an “unfair tax which stops people from buying their own home, settling down with a family, moving for work or downsizing. It makes the dream of home ownership ever more distant for millions of families.”
It added: “Stamp Duty is a disastrous and unfair tax which leads to the misallocation of housing stock and leads to lower incomes and higher unemployment than necessary. It doesn’t even raise much revenue, once dynamic effects are fully accounted for.”
In other parts of today’s hard-hitting report, the Alliance criticises local authority landlord licensing schemes as hitting tenants in the pocket.
It is also calling for the “urgent” liberalisation of planning, including the declassification of some Green Belt. It says that declassifying 5% of Green Belt around London would allow it to expand by almost a sixth.
Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “For decades, politicians have failed to tackle the root causes of the housing crisis: a chronic lack of supply.
“What’s more, Stamp Duty is still punitively high, and gimmicky tweaks to the tax system will ultimately end up penalising tenants and increasing rents.
“The new Chancellor should now seize the opportunity to drastically simplify and reduce property taxes, while removing planning restrictions which prevent huge swathes of land from being built on for no good reason at all.”