The SNP are reforming stamp duty? Good.

Last week the Scottish National Party announced the Scottish Government plans to reform Stamp Duty. 

What to make of this? I have four quick thoughts. 

First, bits of it are simply the right thing to do. At the moment, sellers understandably want to avoid having a tax whacked on their houses, so price them accordingly, just below the cut-offs. This is obviously and undeniably stupid. Reforming stamp duty so it’s sliced by bands, more like income tax, instantly makes it less distortive. JRF’s Housing Market Taskforce argued for this change last year, and it’s good to see those ideas being adopted. 

Second, we don’t actually know what the rates would be. The Scottish Government don’t either, and the consultation says as much. So discussion of whether this is a tax increase or decrease on any given property is, for the moment, a distraction. What’s at stake is the principle. But the very fact that SD will be re-rated at some point before 2015 is in itself significant. That’s because it’s traditionally been reviewed only infrequently. So it’s good to re-rate, and let’s hope this is the first of more frequent and logical bandings in line with house price inflation. 

Third, SD is only one property tax, and we shouldn’t ignore others - especially Council Tax. If you think SD is regressive and a bit daft, then have a look at council tax. It taxes a greater proportion of the value of lower cost homes. It uses 1991 valuations, and successive governments across the UK have ducked the question of revaluing ever since. So looking at SD in isolation makes little sense, and claims to have radically restructured property tax in favour of those at the bottom need to be tempered when council tax retains the same structure. That’s even more pertinent when the Scottish Government will suddenly find itself in charge of Council Tax Benefit in 2013: and as our paper the other week argued, will find itself with very little room for manoeuvre.

Finally – in Scotland, there is no such thing as a constitutionally neutral policy. The reform of land taxes is, um, a bit dry, as far as subjects go. But in Scotland, it’s come hand-in-hand with the proposed creation of Revenue Scotland. Which leads straight into a debate about why Scotland needs its own tax-raising mechanisms, which leads into questions of what’s appropriate for Scotland to do itself, which leads into…you can see where it goes. I suspect that this is what pre-independence-referendum Scotland looks like: policy detail and unionist-nationalist manoeuvring becoming almost inseparable. For organisations like JRF that’s probably easy to handle – constitutional positions not being our thing – but others, particularly non-political policy organisations in Scotland, may feel it more. 

In short: reforming Stamp Duty is a good policy. The politics of it will depend on where you’re coming from.