Stamp Duty – A “Dumb Tax” ?

This morning, around 40 guests were treated at Chesterfield’s Casa hotel to an entertaining look at the economy by Seven Investment Management founder and finance commentator, Justin Urquhart Stewart.

Amongst his insight into the state of the global economy was an interesting comment on Stamp Duty being a “dumb tax”. Justin has been a long-time critic of this government invention.

The government sees Stamp Duty as a way of raising revenue on the back of property transactions. Justin’s view is the opposite. As homebuyers need to find an additional lump sum of cash to pay for stamp duty (the amount varies based on the property value) this means they have less money available to spend on other things, such as furniture for their new home, or paying for other services (builders, gardeners etc.) The additional VAT and related effects (supporting businesses and keeping people in jobs – who in turn spend more, generating more tax revenues) is far more beneficial to the economy than the current Stamp Duty regime.

This view is certainly food for thought, and one that many homebuyers will agree with.