Brits crying out for tax relief

The survey, by independent property portal HotProperty.co.uk, revealed widespread disregard for the governments’ property tax policy, with one third of people saying the increase in the inheritance tax allowance will make no difference to them or their family.

Forty one per cent of respondents said the threshold should have been raised to £1 million pounds or more.

On top of this, 85 percent of people said the stamp duty threshold should also be raised, to give buyers some relief in the tough property market. The main reasons cited were rising house prices and the ongoing struggle for first time buyers to get on the property ladder.

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Managing Director of HotProperty.co.uk, Shawn Luetchens, said: “The 2007 pre-budget report was disappointing for the property industry and for UK homebuyers, as our poll shows. The increase to the inheritance tax threshold was a positive step, but with house prices that have risen steadily for a decade, it was never going to deliver the relief taxpayers were looking for.

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“What’s more, stamp duty reforms were much anticipated and are still strongly backed by buyers. Eighty five percent of people want the threshold increased – even a small rise would have been a helping hand for first time buyers who are at the lowest in a decade.”

There is further discontent with the method currently used to apply stamp duty. Currently there are three threshold increments and a buyer pays a percentage of tax on the entire sale price. Only one in five believes the method should be retained.

Over half of Brits said that it should be taxed in stages by threshold (i.e. on a £300,000 house the buyer would pay no tax on the first £125k, 1 per cent up to £250,000 and 3 per cent up to £300,000) as opposed to the current method or at a flat rate with one threshold level (for example all properties over £300,000 being taxed at 2 per cent).

However, asked what an ideal flat tax rate and flat threshold level would be for stamp duty, the majority proposed a new threshold of £500k , taxed at 1 per cent. Only 14 per cent chose a tax rate over 2 per cent.

Luetchens concluded: “These results should come as a warning to the government in light of the Tories promises to raise IHT thresholds. There is deep-rooted discontent among British UK home-buyers and amid scare-mongers’ claims that the UK property market is getting ready for a crash, it is just another show of no confidence from the public.”