Lovemoney.com - Stamp duty tinkering could affect wider economy

The way Alistair Darling has "tinkered" with stamp duty land tax could have an impact on the wider economy, it has been claimed.

Earlier this week, the chancellor announced that the threshold for first-time buyers will increase from £125,000 to £250,000, meaning 90 per cent of first-time buyers will not need to pay the tax.

Mr Darling explained that the move is to be paid for by increasing the rate for properties purchased for more than £1 million to five per cent.

Ed Bowsher, head of consumer finance at lovemoney.com, said this could lead to a rise in rental of prime properties but could have a negative effect on the economy.

"The biggest losers are the rich," he said.

"When they buy or sell a £1 million home, they'll have to pay five per cent stamp duty. That's a heavy tax. I'm concerned it could damage the economy by pushing talented foreigners towards renting. Then they'll be more likely to leave the UK at the drop of a hat."

Get a landlords insurance quote today from Simple Landlords Insurance.