Jeremy Leaf, the London estate agent and former RICS residential chairman, is the latest industry figure to call for the government to consider levying stamp duty on sellers rather than buyers.
Help for downsizers and first-time buyers by way of stamp duty concessions to stimulate more transactions.
“If sellers, rather than purchasers, pay stamp duty, activity will increase especially if house building picks up too - bearing in mind the increasingly high proportion of first-time buyers who pay [SDLT] now” says Leaf.
He says high stamp duty levied on buyers is stopping transactions across the housing market, not just at the top end but also amongst first time buyers purchasing at the lower end of the market. Leaf claims around 75 per cent of FTBs now pay stamp duty, whereas back in 2008 the proportion was nearer 50 per cent.
Last week another London agent - Trevor Abrahmsohn, head of Glentree International - wrote an open letter to Chancellor Phillip Hammond saying he should consider at least splitting stamp duty payment between vendor and purchaser. “At least the purchaser will feel that under this arrangement, since the stamp duty tax has been effectively halved, this could be the very stimulus that the market requires” Abrahmsohn wrote.
In addition, the Yorkshire Building Society has also called for SDLT to be a sellers’ tax instead of a buyers’ tax. The mutual says first-time buyers could save an average of £3,625 if stamp duty was paid by the seller, while those moving up the ladder could save an average of £4,154.
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Graham, how would this be justified to sellers? Those who bought up to now have paid the tax. When they sell a property on which they already paid the tax they again would have to pay it? That would mean that a "generation" of house sellers would pay the tax twice on one property. Sounds like a policy idea that would not work in practice. Unless I'm missing something.
Very good point Sophia.
What's equally as relevant is that this worsen the 'bedroom blockers' situation. It is difficult enough for some older homeowners to be motivated to move, a huge SDLT bill will be a massive deterrent.
All this proposal is doing is switching the burden to one set of people from another, it is not addressing the fundamental problem ie that it is a tax on London and the South East.
If you are 2.5- 3 hours drive from London you can buy a 3 bed semi for less than £125,000 and pay no SD, in our area (one of the cheaper home counties) it'll cost you 4 times that and you'll have to find £15,000.
How about stopping Stamp Duty altogether! Why should you have to pay tax for the pleasure of buying something you need to live in?
Oh! Poor London home owners! they only make a measly £250, 000 profit on their 1 bed flat over 5 years and have to pay maybe £20,000 of that in tax. Get real! The 3 bed semi mentioned is lucky to increase by £20,000 in a lifetime
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