People daring to buy a home are being taxed to oblivion

Telegraph

19 hours ago

Angela Rayner was the big winner from this week's spending review, where ministers battled it out to convince the Treasury they are most deserving of the billions of pounds they want.
Rayner, the Deputy Prime Minister, who is also in charge of housing, secured £39bn to fund the building of social and affordable homes.
This, coupled with attempts to loosen planning red tape, is part of Labour's grand plan to build 1.5 million new homes to help ease the housing crisis that has kept a generation stuck in a renting doom loop.
Britain's housebuilders will be licking their lips, said Anthony Codling of investment bank RBC Capital Markets. Oodles of cash guaranteed for a decade should, in theory, release the shackles that have been holding back building for a generation.
Whether or not there are enough construction workers to actually build those houses remains to be seen. But as Codling says, while the housing market isn't fixed,'it is less broken'.
Except it isn't.
People who actually want to buy a property, as opposed to rent, are being milked by the state via stamp duty. This is a tax pretty much everyone agrees is terrible – it prevents people moving somewhere bigger when they have families, and downsizing when their nests are empty.
Moving is not only good for society (it makes sense that people in the right-sized homes feel more settled and content), but also the economy. Every transaction generates income for conveyancers, surveyors, builders and so on.
People with room to house growing families are creating the next generation of taxpayers. No wonder the birth rate is worryingly low when it's so hard for young people to buy.
It seems quite clear to me that there should not be stamp duty on property purchases, but politicians are addicted to the roughly £14bn it generates per year. Labour will also be worried about what happened in the pandemic, when a stamp duty 'holiday' caused a surge in purchases and pushed prices through the roof.
You can understand the caution – pumping prices further into the stratosphere doesn't help the next generation take their first steps. But Sir Keir Starmer et al went further, making it dramatically more expensive for anyone to buy a house from April – and first-time buyers were badly hit.
Before April, first-time buyers were exempt from stamp duty on the first £425,000 of a home. Now that has dropped to £300,000, meaning some buyers went from paying £300 in tax, to £7,000 overnight.
This betrayal is all the more cruel because this group of (largely) young people desperately getting on the property ladder, are highly likely to have voted Labour into an enormous majority just last year.
Apart from the pathetic Lifetime Isa (a confusing gimmick that barely helps anyone), there is now no real financial help for people trying to own their own home.
Perhaps the Government's grand plan will come off and there will be a glut of homes available to buy in a decade's time. But that doesn't help people today.
Labour has chosen, again, to prioritise one group of society over another. But Sir Keir and the Chancellor should remember that they were lent votes at the last election, as the end-of-cycle Tories ran out of steam.
Those aspiring to claim their own little piece of England today may not feel like giving Labour another chance next time around. Aiming to boost the number of social and affordable housing is all well and good, but achieving it by taxing the life out of those who dare to buy now is neither fair nor an election winner.