Inheritance tax changes will have little impact

Monday, 12 November 2007 12:00 AM

Changes to inheritance tax will make little difference to the average homeowner, according to a new survey released by HotProperty.co.uk.

When questioned, one third of homeowners said the change in the law to allow couples to combine their inheritance tax and raise the threshold to £600,000 would make no difference.

Furthermore, up to 40 per cent of those questioned felt the level should be increased to £1 million.

"The 2007 pre-Budget report was disappointing for the property industry and for UK home-buyers, as our poll shows," said Shawn Luetchens, managing director HotProperty.co.uk.

"The increase to the inheritance tax threshold was a positive step, but with house prices that have risen steadily for a decade, it was never going to deliver the relief taxpayers were looking for."

The research also found widespread support for changes to stamp duty thresholds.

Some 85 per cent of homeowners would like to see changes to stamp duty thresholds, principally as a method of allowing first-time buyers onto the market.

"Even a small rise [in stamp duty thresholds] would have been a helping hand for first-time buyers who are at the lowest in a decade," continued Mr Luetchens.

There was also support for a stamp duty taxed in stages by threshold - i.e. on a £300,000 house the buyer would pay no tax on the first £125k, one per cent up to £250,000 and three per cent up to £300,000.

An optimistic 40 per cent of respondents thought stamp duty should be abolished entirely.

"These results should come as a warning to the government in light of the Tories promises to raise inheritance tax thresholds," continued Mr Luetchens.

"There is deep-rooted discontent among British UK home-buyers and amid scare-mongers' claims the UK property market is getting ready for a crash, it is just another show of no confidence from the public."

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