Only 5% of homes for sale are free from stamp duty for home-movers, according to Rightmove, rising to fewer than half (40%) of properties for first-time buyers, prompting renewed calls for reform ahead of the Budget.
Pressure is mounting on the Chancellor to review the tax in this year’s Budget, following Kemi Badenoch’s Conservative Party Conference pledge that they would abolish stamp duty if they were to win the next election.
Stamp duty continues to be a major barrier to home-movers and first-time buyers, often adding thousands of pounds onto buying costs. Under current rules, home buyers in England and Northern Ireland must pay stamp duty on properties valued over £125,000, with the threshold rising to £300,000 for first-time buyers.
Calls for change
Rightmove is calling for the Government to review how stamp duty taxes are levied at next month’s Budget and is supporting the Conservatives’ call to see the tax scrapped.
Colleen Babcock, property expert at Rightmove said: “Looking ahead to November’s Budget, we would urge the Government to review how stamp duty could be changed. Even changing the thresholds would be a helping hand for some, but if there was the possibility to go even further, it would be a huge step forward for mobility across the property market.”
HomeOwners Alliance also wants to see the tax abolished, claiming it is a “tax on mobility”.
A spokesman for the HomeOwners Alliance said: “Stamp duty continues to be a tax that puts off families from moving up the property ladder, fleeces homeowners needing to make a sideways move and making it more expensive for older generations to downsize. It’s a tax that is applied every time a property is bought and sold. As a result people are choosing not to move.
“This inactivity limits the number of properties to choose from when buying, in an already squeezed housing market.”
The Government has previously considered plans to change the current system by implementing a property tax on sellers, but commentators claim that this could also end up reducing mobility and ultimately lower Government tax revenues rather than increasing them.
Johan Svanstrom, chief executive at Rightmove said: “We need to make it easier and more attractive for those at the top of the market to consider downsizing if they are in a position to do so. There is no real incentive for someone in a large home to downsize to a smaller one unless they truly need to and can still afford the stamp duty bill.”
