The statistics that have emerged from the recent Budget confirm what our industry has long known: that the Osborne stamp duty changes have been an unmitigated disaster.
They have been disastrous for the government, which has seen a tax take reduction of £1bn this year; disastrous for the advising professionals, whose earnings are fee based and transaction reliant; disastrous for retailers and suppliers that sell or make household furnishings, fixtures and appliances; and disastrous for our communities, which have seen a spate of disruptive basement and loft extensions because extensions cost less than the stamp duty payable on a replacement home.
The introduction of capital gains tax on personal home sales would be political suicide for an incumbent government. George Osborne, well aware of this, imposed his alternative strategy of the current swingeing stamp duty regime, where houses costing over £1.5m in England pay stamp duty up to 12%.
An 11-year-old could have explained to our former chancellor that the housing market was a pyramid. While the bulk of transactions are at the wider lower tiers, aspirational homeowners have to stay put if the tier owners above them refurbish, rather than sell and move on.
As Colbert, Louis XIV’s minister of finance, famously said: “The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
Stamp duty needs to be returned to the levels of 1% to 2% they were at under the Thatcher administration, with the revenues lost being replaced by an overhaul of the council tax bands, which in England have, incredibly, remained unchanged since 1991, with a top band still over £320,000 despite house prices having tripled since then.
An English householder in the top band still pays around £2,500 per year in council tax, whether his home is worth £320,000, £3.2m or £32m.
That is where reform is urgently needed, so that the cash-strapped local authorities can begin to restore services and facilities to the standards that their communities enjoyed before the 2008 economic crash, and the consequential decade of austerity.
So what is keeping Hammond from implementing these corrections to a failed system, for which he was not responsible? All-consuming Brexit, of course.