Gordon’s duty: Boost homeowners with property tax relief - Mazars - United Kingdom

International accountancy firm Mazars is calling for the Government to reintroduce MIRAS and abolish stamp duty on properties worth under £1 million to give the UK property market a badly needed boost.

Ahead of the budget on 22 April, Mazars Head of Property, Partner Stacy Eden, said tools like MIRAS (Mortgage Interest Relief At Source) and the abolition of stamp duty should be re-enacted for two years to give struggling mortgage payers a tax rebate and re-invigorate the stalling economy.

In February, Council of Mortgage Lending (CML) figures showed gross UK residential mortgage lending fell to £9.9 billion, a 60% drop on the previous year and down 15 per cent since January.

According to CML figures, the average home mover borrows £121,497*and spends 13.2% of their income on interest payments, rising to a massive 17.1% for first-time buyers. Therefore re-enacting MIRAS up to £50,000 may save a homeowner £500 and thereby compensate those not benefiting from the fall in interest rates.

House movers currently pay stamp duty of between 1 – 4%, which slams a buyer with a tax bill of nearly £2,000 on a property costing the national average of £195,724. **

Mortgage financing continues to hamper first-time buyers and those with less than a 10% deposit, said Eden. However, house building has stalled and with a rising population adding demand, the outlook for house price growth looks solid, he added.

Eden, who saw revenue for his property and construction team grow 15% last year in falling markets, said buyer and seller nervousness can’t go on forever.

“If the same government that withdrew MIRAS, rejecting it as little more than a middle-class perk in 2000, reintroduced it in 2009, Prime Minister Gordon Brown would be helping far more than just the middle-classes this time,” said Eden.

He continued: “In fact, if he committed to a double-whammy, also abolishing stamp duty below £1 million, he could be viewed as a hero across all of the home owning classes this time.”

*December 2008 figures

** The average property price in the UK, March 2009, DCLG property index.

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About Mazars:

A jpg image of Stacy Eden is available on request.

Mazars is an international firm specialising in audit, tax and advisory services that operates as an integrated partnership in 50 countries worldwide.

In the UK, Mazars is the eighth largest partnership in terms of audit fee income, has the fastest growing tax practice amongst the Top 20 firms, and was named ‘Large Firm of the Year’ at the Accountancy Age Awards 2008.

The firm employs more than 1,000 people and has over 100 partners based in 17 offices throughout the UK.