THE decision to scrap stamp duty for first-time buyers purchasing homes under £250,000 risks becoming a “charter for cheats”, critics suggested yesterday.
Although the housing industry has welcomed the move because it should boost a flagging market, there are fears that it will be hard to police.
Some institutions, such as the Council for Mortgage Lenders, have said they would have preferred blanket relief applicable to all purchasers, rather than just first-timers.
There was some uncertainty over the rules but it looks as if anybody that has invested in a property or part of a property anywhere in the world will be exempted from the benefit.
“This is going to require a degree of honesty,” said Ernst & Young tax partner Andrew Tailby-Faulkes.
HM Revenue and Customs warned that cheats will pay a heavy price if they do get caught by the tax authorities.
They could face a fine of up to £5,000 in England and Wales, or £10,000 in Scotland, as well as imprisonment for up to six months.
The stamp duty relief has already come into force and will be policy for two years.
The measure is intended to help first-time buyers get onto the housing ladder, although critics have warned many will be deterred because of the large deposits being demanded by banks and building societies.
The government said it would recoup the money it will lose by abandoning the duty on these homes by increasing it on £1m plus houses.