Following the latest Government advice on home moving during the Coronavirus (Covid-19) outbreak, find out more on how we can support your conveyancing journey.
Radical reform of Stamp Duty Land Tax would take nine out of 10 home buyers in England out of paying the tax altogether.
The effect of raising the threshold at which the tax is paid would also revitalise the house-building sector as developers react to increased demand from buyers who would be free from paying the duty.
A report entitled Stamping Down by the Centre for Policy Studies (CPS) has called on the Government to consider reforming the stamp duty system, which currently brings in around £5.1 billion to the Treasury every year.
Alex Morton, the CPS head of policy, is a former adviser to David Cameron when he was Prime Minister and has written the report.
He says raising the threshold at which buyers must pay stamp duty from £125,000 to £500,000 would mean nine out of 10 buyers in England no longer have to pay the tax.
The current average cost of stamp duty in England is £2,300 with buyers in the south-east forking out more than £6,000 when they buy a property.
Morton says raising the threshold would cost £1.6 billion, but the spin-off benefits in increased transactions and a rise in house-building would replace that revenue for the Government.
His proposals would only affect residential property transactions. Buy-to-let landlords and those buying an additional property pay higher rates of stamp duty, and those would not change in this suggested reform.
Robert Colvile, director of the CPS, sayd: “It’s no coincidence that stamp duty is one of the taxes that people hate the most.
“It’s a huge barrier to people living in the kind of homes that best fit their families and their lives.
“And as our report has shown, the current sky-high levels are doing more harm than good.
“We urge the Government to take bold action to stamp down on stamp duty and get the property market moving again.”
Fran is the content writer for Capital Conveyancing, producing articles on all aspects of the conveyancing process and around the UK property market in general. If there is a topic you'd like to see covered on these pages, please drop Fran a line on [email protected]