Mortgage brokers have shared their skepticism over James Cleverly’s promise to abolish stamp duty if he were to become Prime Minister in the future.
Writing in the Telegraphthe Conservative leadership candidate promised to abolish the ‘perverse’ tax.
He wrote: “We were right to reduce stamp duty for first-time buyers.
“But I want our ambition to be to completely abolish stamp duty on housing.
“It’s a bad tax that keeps too many people from getting into the housing market.
“It discourages housing transactions, keeps older people from downsizing and young families from increasing, and slows the construction of new homes.”
Aaron Strutt of Trinity Financial says: “Abolishing stamp duty is a nice idea, but in reality it will generate too much money for any government to simply abolish it.
“Last year stamp duty raised more than £15 billion in tax and this money would have to come from somewhere or be cut from other areas of government spending.
“It would be a nicer idea to reform stamp duty or if there were incentives to entice the elderly to cut back to free up property.
“If it were to be scrapped, house prices could well rise and foreign buyers would also likely be tempted to buy up more investment properties.”
It’s a view shared by Martin Stewart, director of London Money.
He says: “I’m sure the five years between now and this policy coming into effect will fly by.
‘In the meantime, we can look forward to seeing how James Cleverly plans to plug the hole in the public finances he will create by abolishing stamp duty.
“The policy would actually make house prices even more out of reach for many than they already are.”
Private Finance technical director Chris Sykes says this is not a realistic policy.
He says: “The tax generates a huge amount of revenue for the government
“However, it could be completely overhauled.
“There could be less stamp duty for those making cuts, providing more incentives to free up family homes currently occupied by older couples and singles.
“For example, it could be regionalized so that someone who buys a ‘normal home’ in certain postal codes does not pay at all or only pays a small amount, while someone who buys a home that is larger than they need pays for it.
“There are plenty of things that can be done to make stamp duty a less restrictive tax.
“Could this drive up house prices? Possibly.
“We all saw what happened during the stamp duty holiday.
However, “vacation” brings urgency and panic, while full reform or open-ended abolition would not.”