Rich root out stamp duty loopholes

Ed Hammond and Jim Pickard write in the FT, “Wealthy homebuyers have already found loopholes to avoid paying the top stamp duty rate, less than a month after George Osborne introduced a higher levy as the centrepiece of his Budget… One of the new avoidance schemes, marketed by a handful of London-based solicitors, involves buyers signing multiyear leases that are automatically renewed on a rolling basis. As the value of each lease is much less than the freehold of the house, the top rate of stamp duty can be circumvented.“

See full article in the Financial Times

Stamp Duty was a bad idea from the outset. It should be no more than sufficient to cover the Land Registry costs when property titles are transferred. We in the Land Value Taxation Campaign said exactly that in a submission to the civil service when the system was reviewed a few years ago under the Labour government. Of course no notice was taken. We have argued repeatedly that the appropriate way to raise revenue is through a charge on the assessed annual rental value of land, the liability to be attached to the freeholding. Then it can not be evaded.

Perhaps one day someone will take the point. In the meantime there is is the dubious pleasure of being able to say “we told you so”.