Chancellor George Osborne disappointed many in the property industry by ignoring calls to resolve long-standing problems with stamp duty in yesterday's Autumn Statement.
Scrapping stamp duty for low-cost properties would have accelerated the housing market recovery and make the system fairer, experts say.
The hated tax is turning into a welcome cash cow for the Treasury, however, with receipts expected to hit nearly £17 billion a year by 2018/19 as house prices continue to recover.
RICS chief economist Simon Rubinsohn said: “It was disappointing to see long overdue changes to stamp duty ignored, particularly as the amount of revenue generated from this is rising sharply.
"The government plans to collect more than £60 billion in stamp duty receipts from British householders over the next five years. Moving away from stamp duty brackets to a marginal system would be a boost to those struggling with the cost of living and help boost the number of property transactions.
"This will remove the so-called ‘dead zone’ which sees a dearth of properties on the market between £250,000 and £270,000."
Grenville Turner, chief executive of Countrywide, said: “We believe today’s Autumn Statement was a missed opportunity for the Chancellor to announce further measures to help first and second-time buyers, homeowners and the UK housing market as a whole.
“We see at first-hand the issues facing property buyers and home movers and one key issue is the stamp duty land tax system, which we believe in its current format is outdated and prohibitive to promoting growth in the housing market.
“It would have been good to see the Government scrap stamp duty for all properties worth £250,000 and under. This would have a small impact on tax receipts as only 13% of stamp duty comes from properties worth less than £250,000."
The government needs to develop an innovative and fairer solution by reviewing both the thresholds and ‘slab’ mechanism, Turner said.
Nick Sanderson, chief executive at Audley Retirement, was disappointed by the Chancellor's failure to even discuss stamp duty.
"The call by Conservative MPs to scrap all stamp duty on properties worth less than £500,000 was welcome, and to ignore those calls is an opportunity missed.
"It would make a huge difference, particularly to the older generation. The majority of those aged over 65 own their homes outright and the government must recognise the need to encourage them to downsize and free up much needed existing housing stock.
“The Chancellor should have facilitated this downsizing by listening to the MPs calling for changes to the current stamp duty laws, or indeed taking it a step further and introducing a stamp duty exemption for those over 65.”
Paul Smith, chief executive of estate agent haart, also regretted Osborne's failure to act. "In one fell swoop he could have given buyers and sellers a real impetus to move.
"He has failed to see the value of people putting their properties on the market and going through the moving process, buying goods and services, thus getting the VAT tills ringing. Mr Scrooge is alive and well.”
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