The Conservatives announced they they would raise the Inheritance Tax threshold and abolish Stamp Duty for first time house purchasers. Both policies are cynical or nonsensical or both. Inheritance Tax has become a problem for many people in London and the South East as a consequence of the house price bubble, in reality a land price bubble. If it was not for that, it would not be an issue. Since the land price bubble is also a problem for house purchasers, surely that is what needs to be addressed? Cuts in Stamp Duty will not help first time buyers. The effect will simply be to drive up house prices or prevent them from falling. The beneficiaries will be the house sellers. To propose a cut in Stamp Duty to help purchasers demonstrates a worrying failure in understanding of economics. That said, there is no justification for taxing property transactions per se. This merely discourages people from moving or selling, and creates shortages. Stamp Duty should be no more than is needed to c...
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