The National Association of Property Buyers (NAPB) also urged the chancellor to ensure he avoids the mistakes of the “botched” mini-Budget delivered by his predecessor Kwasi Kwarteng.
NAPB spokesman Jonathan Rolande said: “As we witnessed with Kwasi Kwarteng’s botched mini-Budget, moments like this shape and change people’s lives.
“That’s why many homeowners and people working in the property sector will be hoping Jeremy Hunt announces a package of measures that provide us with optimism moving into 2023. He has his work cut out.
“The property market is long overdue reform. There is still far too much inequality between those that were old enough to buy property years ago, and those who today stand little or no chance of ever repeating the upward mobility their parents and grandparents enjoyed.”
Rolande called for reform of the £12bn stamp duty “cash cow” suggesting that buyers of second or additional homes, who currently pay an extra 3% rate, should see this “increased to 3.5% or even 4%”.
He added: “It would not be enough to deter any but the flakiest buyer, and the additional amount could help fund cuts elsewhere.
“Why should a pensioner selling a larger family home pay £5,000 in tax to move downmarket? It discourages house sales and blocks supply and should be scrapped
“Second, I’d like to see Hunt increase Capital Gains Tax (CGT). In effect, this is a tax on unearned income, which is currently at a rate of 10% to 28% on profits. Somebody who bought an investment property years ago has seen such massive growth in value, surely they could lose a percent or two more?
“Third, let’s have a grown-up conversation about Inheritance Tax (IHT). Much like CGT, this is a tax on wealth, most often the deceased’s home. And it has shot up in value in recent years. Up to £325,000 can still be left to loved ones tax-free but anything above that is at 40%. Pushing this up is one of the few ways to raise revenue without taxing the person who generated the wealth – they don’t need it anymore.”
Rolande added that Hunt should also set up Government Property Bonds to “encourage people to invest in bonds that guarantee capital but offer a return linked to the property market”.
He said: “This would allow those trying to save for a property to feel invested in the market while they do so. The funds raised could be used to build government social housing, saving millions in Housing Benefit. Encouraging people to save would also ease inflation pressures.
“Next, it would also be encouraging to see Hunt address the fact that 13 million homes have below-average insulation. Let’s encourage landlords to improve their tenant’s homes by offering tax breaks for work that improves the EPC rating.
“Finally, Hunt should reward landlords who rent their property long term with sensible fixed increases, a tax break too. This will make tenants feel much more secure in their homes.
“I don’t expect Hunt to announce all these measures. But even one would have a transformational impact on the market and provide a much-needed boost going into the New Year.”
Source: Property Week