Tory peer labels Stamp Duty a ‘tax on mobility’

A former minister has questioned whether the Government has a long-term commitment to reform Stamp Duty to boost transactions and has asked for greater consideration of the impact of the charge on London homes.

Speaking at the second reading of the Stamp Duty Land Rax (Temporary Relief) Bill in the House of Lords this week, Tory peer Lord Greenhalgh described the charge as a “tax on mobility.”

The aim of the legislation is to officially increase Stamp Duty thresholds, as initially mentioned in the September mini-Budget,  until 1 March 2025. 

Lord Greenhalgh, who was an unpaid Minister of State jointly at the Ministry of Housing, Communities and Local Government and the Home Office between March 2020 and July 2022 said his own research had found that while cutting Stamp Duty doesn’t increase the Treasury’s tax take, increasing it  “as we will see a reduction overall transactions.

He said: “Is there a longer- term commitment to reduce this tax on mobility so that we can see people moving and can get closer to the era when people could move more easily—rather than building sideways, upwards and downwards—to homes that are appropriate for their needs, so they have a bigger home when they have a family and then can downsize in their older years?”
 

He highlighted that this is a tax that falls on London, adding: “As a Londoner, I am conscious of the fact that, until recently, two-thirds of Stamp Duty was raised in London alone. 

“That has dropped a little with the tax reduction to 55%, but we have to be cognisant that jamming up the London market is not necessarily good for our capital city or for the wider economy. We need to be aware that stamp duty is simply much higher than what we were used to. 

“In the first decade of the 2000s, the highest you could pay on a property transaction was 3%, but we have seen that balloon over time.”

Responding on behalf of the Government, Parliamentary Secretary to the Treasury Baroness Penn said: “While we support mobility overall, and there are a number of government measures aiming to do that—Stamp Duty is part of it—we have to balance action in that area against the fact that it is also an important source of government revenue. 

“We think the action we have taken in this Bill strikes the right balance, providing temporary support during a difficult time for the economy, in particular the housing market as we see higher interest rates, with the need for fiscal responsibility too.”

She acknowledged that higher property values in London means the capital “disproportionately contributes” in terms of Stamp Duty, adding: “In the temporary reforms we have put in place, increasing the threshold at which you can claim first-time buyers’ relief helps first-time buyers in the capital facing those higher rates.”