As ever there are calls for the government to change the stamp duty land tax (SDLT) regime so as to get the housing market going.

Today in the Express the taxpayers' Alliance, Rightmove and an estate agent ( all called for an overhaul because more and more people are getting caught in the 3% tax band when they buy houses worth over £250,000. This they say is an added burden on 'average' buyers as house prices continue to go up.

There are seven bands as follows, which apply to the whole of the purchase price.

* Up to £125,000 – 0%

* Over £125,000 to £250,000 – 1%

* Over £250,000 to £500,000 – 3%

* Over £500,000 to £1 million – 4%

* Over £1 million to £2 million – 5%

* Over £2 million – 7%

* Over £2 million for certain non-natural persons/corporate bodies – 15%

The band that is attracting the most attention is the £250,000 – £500,000 one, as more people move into it with rising house prices.

Presumably those calling for change want the tax reduced in that band to get property shifting (for their own profit as they need property changing hands to survive). More property selling would make up for the lost revenue per each transaction would also make an attractive part of the argument.

But stamp duty is only one of the many costs related to buying a house. Apart from the purchase price there are: solicitor's fees, removal fees, mortgage fees (if applicable) and valuation/survey fees. After that there could be DIY costs as well.

iStock_000001029047XSmallI would therefore think that what would actually happen is that the cost price and all these other costs would rise a bit to soak up the money freed from a reduction in SDLT.

There are also a lot of homes priced just below the £250,000 threshold that would suddenly leap in price once the tax shackles were eased.

A change in SDLT would just remove a brake from rising house prices and feed the house price bubble. And the Treasury's loss would be others' gain.

The lesson we should surely have learnt is that house prices rise to soak up any available money.

Of course there is also the question of how 'average' someone is who can afford a house worth over £250,000.

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