The UK Government must overhaul stamp duty land tax radically to create a fairer system for consumers, says Royal Institution of Chartered Surveyors (RICS).

Proposing a system that would benefit 99% of home buyers, RICS called on the Government to find a way of implementing the policy, which will provide a boost to the economy and the faltering housing market.

RICS proposes the abolition of the existing slab tax system, replacing it with a two tier marginal tax system. No one will pay stamp duty on the first £150,000 of a house price. Above this value a 2.5% marginal rate would be charged on every pound up to £250,000, with a 5% marginal rate applying to every pound thereafter.


Everyone purchasing a home under £1 million will pay less stamp duty, benefiting 99% of all prospective homeowners. Currently, a buyer looking to purchase a £250,000 property will pay £7,500 in stamp duty. Under the RICS proposal they will now pay only £2,500, making the property market more accessible, especially for those first time buyers struggling to pull together the funds needed to get on the property ladder.

With transaction levels plummeting first time buyers have been hardest hit seeing their home ownership dreams evaporate. With long-term house price rises outstripping wage inflation, food and fuel bills rising, and tighter lending criteria being applied by mortgage companies, the residential property market is becoming more inaccessible.

RICS Director of External Affairs, Gillian Charlesworth said: "After having mortgages pulled from beneath their feet from lenders facing the full brunt of the credit crunch, consumers are looking to the Government for help. HM Treasury needs to find a way to implement this policy or, if they can't do this imminently, to introduce a stamp duty holiday that will get the market moving."

(CD/JM)