A leading professional body is calling for property tax in the UK to be overhauled with an aim to encourage activity in the market.
The Royal Institution of Chartered Surveyors (RICS) recently revealed its latest RICS Residential Market Survey. In the survey, nearly 50% of members advocate incentivising people to downsize by making changes to property taxation, which in turn would help young people climb onto the property ladder.
In addition to removing stamp duty for downsizers, some RICS members suggest altering council tax rates so that council tax revenues make up any shortfall from stamp duty.
The idea of making people with larger properties exempt from paying stamp duty if they downsize would, the survey suggests, free up vital housing stock and redistribute it more efficiently so that families halfway up the property ladder can have access to larger homes.
Abdul Choudhury, RICS Policy Manager, had this to say: “Any changes to the system of tax should be considered carefully, as they would have disruptive consequences that could negatively impact activity.”
“However, given the state of the housing market, it would be prudent for the government to consider the cumulative impact current taxes are having on behaviour and determine what changes can create a more sustainable and vibrant property sector”, Choudhury added.
RICS is urging the government to review the stamp duty system to see how it can make changes to meet market needs while still achieving the necessary revenue.
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