The abolition of stamp duty – advantages and disadvantages

The British real estate industry discusses the decision to abolish Stamp duty for first-time buying a property.

Chancellor Phillip Hammond listens to the needs of the industry and recently at Downing street was held several meetings with members of the construction industry and the market of real estate of great Britain, where the main issue was the Stamp duty. However, this kind of step is the negative side of the coin – the market of real estate of Englandis experiencing problems with the supply of housing, it may be a total deficit of affordable housing.

In fact, this innovation is aimed at buyers of property in London and the South East of England, where, because of too high prices, the market is slowed relative to the rest of the country. For example, in London, where the average price of the property is now £410000, buyer , in case of cancellation of Stamp duty, will be able to save about £5000 pounds.

However, there is a real problem with the supply of new housing. The abolition of Stamp duty would lead to surge in demand, and if supply does not grow, it will significantly raise the price of residential property.

Meanwhile, there are critical remarks in the direction of the bill. The abolition of Stamp duty for the bottom of the market will not significantly move the market, as other market participants is limited too rigid scale of Stamp duty. For the positive effect it is necessary to revise the entire scale.

Short-term effect from this innovation can not solve the fundamental problems of the market of real estate of England – the supply of new housing and the inaccessibility of the Deposit.

® Alice Morgan. 24.11.2017 G.

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