Stamp duty is a subject of great interest to me these days, so much so I decided to do some research on its history.
And lo and behold I discovered it’s much older than I ever thought. In fact the Battle of the Boyne wasn’t that long past when it was introduced by the English Parliament to pay for its war with France in 1694.
King William of Orange was on the throne at the time and he set up the Bank of England to fund the war. Given that few people would have owned homes at the time the duty was imposed on most everyday things including velum. No one escaped the duty, not even the poor.
Anyone buying a house today costing more that £125,000 will face levels of stamp duty up to 2 per cent. It has been described as not just a tax on the rich but on freedom and happiness.
We have a former Labour Government to thank for the hike in duty which, it could be argued, has damaged the property market maybe beyond repair.
Twenty years ago a newly emboldened Gordon Brown decided the 1pc duty on properties over £60,000 was not nearly enough. And so he introduced two new stamp duty bands – 1.5pc on property over £250,000 and 2pc for homes over £500,000. The average home then was worth £60,000 so most ordinary home owners were not unduly concerned. However Brown, three years later, raised the top two bands to 3pc and 4pc respectively creating a bonanza for the Treasury – from £830m to a dizzy £6.5bn in the first 10 years of Labour Government.
In 2005 the stamp duty threshold was raised from £60,000 and then to £125,000 a year later. Few home buyers were exempt. Critics of current Government policy would say the levels of duty have left young people unable to buy a home and the elderly unable to downsize.
Baroness Altmann, the Tory peer and former pensions’ minister has said many older people are living in homes which are probably too big for their needs but moving has become too expensive.
She says: ``Stamp duty acts as a significant deterrent. Anything that the Government can do that will encourage them is beneficial as it will free up accommodation for growing families and will also allow more people to live independently as they get older.’’
She is advocating a `stamp duty holiday’ for older people. Research shows that something like 1.2 million pensioners would be prepared to move if they didn’t have to pay stamp duty.
So what would people of my generation really want to live in as they get older and why would they want to leave a home they’ve been in for decades with all its memories? More importantly perhaps, why would they want to create so much upheaval at a time they are less fit to do so?
Sadly more and more elderly are having to live alone because their children have had to go where the work is. Those children will buy their own home and it takes two incomes to fund the mortgage.
With the Government encouraging women, particularly mothers back into the workplace even before a baby is weaned, this puts pressure on modern families who simply have no time to look after elderly parents. Worse still, this Government has helped foster the notion that old people are a burden particularly to the Health Service.
Commentators who should know better push the message that the baby boomer generation (my generation) live at the expense of the young who can never hope to create the wealth their parents had. They chose to forget that ageing today brings loneliness in a scale never known in our parents’ generation.
So stamp duty helped England fight wars and no doubt King Billy got a share of it to fight the subsequent battles he was involved in.
It’s still with us, crucifying in particular those who want to get on the property ladder and the elderly who just want a simpler life and continued contact with their families.