stamp duty takings forecast to grow from £7 billion in 2013-14 to £16 billion in 2019-20

The Chancellor’s overhaul of the stamp duty system is not sufficiently comprehensive as it should have been and still makes the charge “a bad tax” which is set to double its take from house sales in the next five years.
That verdict – from the independent Institute of Fiscal Studies – is one of the few negative responses to George Osborne’s stamp duty changes, which make house purchases cheaper for 98 per cent of home buyers.

The IFS says that on current transaction forecasts, stamp duty is still forecast to increase from £7 billion in 2013-14 to £16 billion in 2019-20.

Paul Johnson, director of the institute, says the change was “modest” and would “leave the system as a whole largely intact” making it “not the substantial overhaul of the taxation of housing [that] we need.”

In the Mirrlees review of taxation, the IFS called for the abolition of stamp duty in favour of a housing services tax and a land value tax. Gains or losses on properties were likely to be felt by current owners rather than buyers according to the institute, as they would be forced to integrate changes into asking prices.
LSL Property Services says that probably price rises over the next five years will take tens of thousands more properties into higher tax bands, even under the new system. With the new stamp duty bands not being revised until 2020, an LSL spokesman says “this could be seen as cunning use of fiscal drag.”