Stamp duty thresholds should be altered to make the property market fairer, a national body has stated.
There are a dearth of properties on sale for between £250,000 and £275,000 because buyers are worried about the additional costs associated with such a move, according to the Royal Institution of Chartered Surveyors (Rics).
Under the current system, people who buy houses for under £250,000 face a tax bill of one per cent, but this rises to three per cent as soon as this limit is reached.
This means many sellers put their properties on the market for less than they are worth as they recognise people will be put off making an offer for more than £250,000.
“The current stamp duty system … is both out of date and distorts the market by taxing buyers disproportionately high amounts should they go just £1 over the pre-set thresholds,” said Jeremy Blackburn, Rics head of UK policy.
He is calling on Chancellor George Osborne to introduce a “more intelligent” tax system to keep pace with changes in the market.
The average stamp duty outlay now exceeds £5,000, according to research by TSB, which highlights how significant a financial commitment it is.
However, not everyone is adopting a diligent approach to the tax, as 14 per cent of second and third-time house buyers admitted they forgot to factor in the measure when buying a property.