HC Deb 27 October 1983 vol 47 cc414-5
6. Mr. Heddle

asked the Chancellor of the Exchequer what is his latest estimate of the yield to the Exchequer from stamp duty on the disposal of freehold and leasehold property.

Mr. Hayhoe

The Budget estimate for 1983–84 was £510 million.

Mr. Heddle

Is not my hon. Friend undertaking a review of stamp duty, and is not a consultative document out at present? Does he agree that if new house transactions were relieved of stamp duty this would stimulate the construction industry and help first-time buyers?

Mr. Hayhoe

My hon. Friend is right to say that the consultation document has been published, and 70 replies were received by the date on which we asked for reply, which was 30 September. The replies are now being considered carefully. It is difficult to justify the exemption of one type of property, such as new houses, and it is equally difficult to exempt first-time buyers. However, 80 per cent. of first-time buyers do not pay stamp duty.

Mr. Kirkwood

Does the Minister agree that the threshold at which stamp duty is set is so high that it is beginning to restrict social mobility around the country? Is it not unfair that the Government should index-link the thresholds for capital transfer tax and capital gains tax, but not do so for stamp duty?

Mr. Hayhoe

The threshold for stamp duty on property has been raised twice since the 1979 election, but it is lower than what would have been required to keep pace with prices. That is not a major or significant impediment to social mobility.

Mr. Alexander

Does my hon. Friend agree that a penalty of 2 per cent. on a purchase price of more than £40,000 is a significant disincentive to a prospective purchaser? To encourage home ownership and mobility of labour, will he consider the possibility of imposing stamp duty on the excess over thresholds of £30,000, £35,000 and £40,000, rather than on the entire purchase price?

Mr. Hayhoe

The slice approach, about which my hon. Friend talks, was one point that emerged as a result of the consultation document. It has many supporters, as opposed to the band principle. I suspect that most people wish to see a reduction in the stamp duty yield, as we all do, but one must take account of the significant revenue that it brings in. I know that my right hon. Friend the Chancellor will be considering all those matters in his next Budget.