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Tuesday 1st July 2008
Stamp duty on home sales must be reduced in order to stimulate the property market, the Royal Institution of Chartered Surveyors (Rics) has said.
The body issued the call in the wake of further gloomy news on UK house prices: with research firm Hometrack finding that the average property lost 1.8 per cent of its value last month.
Rics proposes that the current stamp duty obligation should be rejigged into a two tier system - which it estimates would cut the total amount paid on the levy by around 25 per cent.
In a statement, the institution said: "Rics believes that government should lower barriers arising from [stamp duty] for those moving onto and up the housing market. This has increasingly been an issue as prices rose and government received a stamp duty revenue bonanza.
"But in a world of static or falling prices, these barriers further drive down transactions with a knock-on impact on the economy."
Under the terms of the recommendation, homebuyers would not pay the tax for the first £150,000 of their property purchase, leaving a 2.5 per cent rate for the next £100,000 paid and a five per cent tax for sums over £250,000.
This would replace the current system of one per cent tax between £125,000 and £250,000, three per cent for the next £250,000 and four per cent thereafter.
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