 PKF urges the Chancellor to create a temporary £1million
exemption from SDLT to kick-start the housing market
14 November 2008: PKF Accountants & business advisers is urging the Chancellor to kick- start the economy and ailing housing market by temporarily raising the Stamp Duty Land Tax (SDLT) nil rate band on residential properties to £1million, in his Pre-Budget Report.
The Government has hinted that a £15 billion giveaway is needed in order to stimulate the economy and temporarily raising the SDLT nil rate band is a sensible measure to get the property market moving again, says PKF Tax Director, Marios Gregori.
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 | Marios explains, “The SDLT statistics for 2006-07 and 2007-08 show the Government received £6.5 billion and £6.6 billion respectively on residential transactions. The figures for 2008-09 are likely to be much lower, so introducing a temporary extension of the nil rate band will not cost the Chancellor a huge amount more than doing nothing. |
“In early September, the Government did introduce a one year holiday on stamp duty, raising the minimum threshold by £50,000 to £175,000. But the statistics prove that this was not a bold enough move – certainly not for London and Southern England: in September the number of mortgages for new house purchases fell by 15% according to the Council of Mortgage lenders.”
Marios continued, “The pressure put on the banks last week in the wake of the interest rate cut, shows that the Government sees a recovery in the housing market as a major step to a wider economic recovery. Raising the SDLT threshold for one year will make buying a house in 2009 a much more attractive option for many and the knock on effect of stimulating an area of the economy that is desperately struggling, is obvious.”
Another measure that has proved effective in the past could be to re-introduce the Mortgage Interest Relief at Source (MIRAS) scheme for basic rate taxpayers. From 1983 to 2000 the scheme enabled borrowers to get tax relief on mortgage interest at the time the interest was paid. A similar scheme put in place now for first time buyers, to give relief for the first five years of their mortgage, would make mortgages more affordable and could help to get the property market moving.
But, Marios concludes, “As the failure of the package announced in September proved, the measures required need to be bold and the simplest way to kick start the housing market is to provide temporary relief from SDLT.”
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For further information, or to speak to a tax expert, please contact:
Jane Murray, PR Executive, 020 7065 0135, jane.murray@uk.pkf.com
For general enquiries please contact our switchboard on 0207 065 0000
Notes to Editors:
- PKF is a leading firm of accountants and business advisers with more than 1,800 partners and staff operating in 23 offices in the UK mainland firm, a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk.
- PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
- PKF (UK) LLP is a member of PKF International which is an association of legally independent firms with more than 14,650 people operating in 119 countries around the world.
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