Conservative Party leadership contender Boris Johnson has expressed an interest in switching the stamp duty burden from buyers to sellers.
Until now Johnson’s comments on the stamp duty issue - mostly delivered through his columns in the Daily Telegraph - have suggested he wants a cut in the duty but not a shift in who should pay it.
Johnson wrote in the Telegraph last month: "I think particularly in London there is clearly a problem with stamp duty and it needs to be addressed … I’m not going to put a figure on how much we’re going to cut but we will certainly be looking to do that because I think actually you can do that in such a way as to increase revenues if you get it right because the market is locked up at the moment.”
But now a trade body - the Association of Accounting Technicians - claims Johnson is considering adopting its policy of switching the burden to the seller.
Earlier this month, Johnson met with AAT and agreed to examine their stamp duty recommendation further, requesting further information.
“AAT is naturally pleased that Boris [Johnson] has agreed to look at our long-standing proposal … this will save the taxpayer £700m a year by rendering first time buyers relief redundant. It will also protect the £9 billion of revenue stamp duty generates as it will still be paid in full, simply by different people. It is also much more progressive as it will be paid on the lower priced property being sold rather than the higher priced property being bought” says an AAT spokesman.
Earlier this year figures produced by HMRC and analysed by investment consultancy London Central Portfolio suggested that stamp duty receipts fell 8.5 per cent in 2018 compared to the previous year.
The duty gathered for HMRC some £8.669 billion, some £802m less than a year ago.
Receipts from the Additional Homes surcharge - that's the three per cent surcharge on buy to let properties and holiday homes - dropped 14.2 per cent last year when compared with 2017. The surcharge contributes 18.8 per cent of the total stamp duty ‘take’ whereas a year earlier the proportion was 21.1 per cent.
Since 1999 successive governments have changed stamp duty levels 13 times, almost all in an upwards direction, but not everyone is delighted at the prospect of a possible Johnson government reversing the trend with a cut.
Yesterday we reported that leading Scottish property agent David Alexander described Johnson’s proposal to scrap stamp duty for homes below £500,000 as“disastrous” for the Scottish market, as it would effectively encourage buyers and investors to spend elsewhere in the country in currently more expensive housing locations.
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Genius idea.
Mr vendor you now have to cover stamp duty cost on the sale of your property, what you want to increase your asking/ selling price by an amount to cover this proposition. Excellent news, that will stimulate the property market by increasing the sale price of your 500k instruction to 515k overnight. Also, it will help all of those nice national homebuilders who offer to pay the stamp duty as a deal sweetener already, they would need to offer a further incentive to stay ahead of the curve, which of course would be absorbed in even higher selling prices, brilliant Boris ideas, sounds like a real stimulus to the industry, ever thought about asking estate agents for their views?
I actually quite like the idea, especially if it’s combined with a cut in the top rates. It will help psychologically as the seller tends to pay out of profit and the buyer is relieved of the need to find the money. Even in a like for like swap I think it would provide a much needed stimulus
A view we have held for a while and will turn a bad tax into a good one. Will increase transactions and much better solution than idea of capital gains tax on principal residence
Go for it Boris after you get us out of EU before or on 31 Oct.
Not worried about any stamp duty effecting scotland. They get so many other benefits the rest of the UK dont.
So anyone with just has enough equity for the costs and deposit of their next purchase will be stranded, unable to move? Or am I missing something?
Nope you aren't missing anything.
Just bonkers Boris with a ridiculous idea
Boris is listening to the latest ideas to keep Govt revenue high and trying to get movers moving again.
This latest advice he has been given is flawed because the seller has already paid stamp duty when they purchased the property. Needs more thought. But at least he is looking at this major issue.
Reduce stamp duty and more property will sell.
The result being the amount of revenue actually increases.
Something elae for HMRC to mess up.
People won't sell = Reduced Supply of stock.
Transaction levels have reduced dramatically over the years.
Fluid market = higher revenues = moving economy = new kitchen, furniture etc.
Increase selling costs, 'i'll just keep the property'
We need more stock, more people selling, making it easier for sellers - more supply please.
Most people need a substantial amenity improvement to justify moving.
Moving costs are now so prohibitive as to consider improving rather than moving.
SDLT is a dead tax and advantages nobody apart from the State.
Far better to spend the monies on improving the existing property.
Of course what happens is that properties become all improved.
All the cheaper properties end up improved.
So fewer cheaper properties.
Meaning far fewer are able to purchase.
So penal SDLT will result in fewer properties being available at lower price points because they Will have all been improved.
Penal SDLT rates have a stultifying effect on the property market.
This assists nobody.
It would be better that SDLT was abolished.
The loss of the SDLT to the Treasury would be more than offset by the substantial increase in people moving which then results in the economy improving as a result of movers buying new stuff and DIY etc.
Just this increased economic activity will be more than enough to cover the losses to the Treasury caused by abolishing SDLT.
The uk is all about tax tax tax !
ok let the seller pay stamp duty,are the government so stupid? what will happen?
Well I will just add it to my selling price! as I do to all my costs,eg estate agent fees,solicitor costs etc.
I work out my selling price and add in all above ,to arrive at a new selling price,simples!!!!!!!!!!!!
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