Stamp Duty - it's time for the industry to box clever

So much has changed in the world of property of late that it’s easy to be behind the times - and that certainly applies to the industry’s view of taxes.

In the weeks leading up to a Budget or major financial statement from the Chancellor (spoiler alert - the next one is in November) my email inbox fills with pleas from agents and trade bodies for the government to scrap stamp duty on either (a) all property purchases or (b) additional homes or (c) those in some hastily-invented enterprise zone.

I’ve got news for those wanting these tax reductions: they aren’t going to happen.                                      

Just because stamp duty is a known barrier to social and literal housing mobility, and just because landlords are needed to provide housing which public bodies have failed to build themselves, does not mean that this or any other government is going to make taxes lower for home owners or buy to let investors alike.

Certainly within 18 months of a General Election, no government will think it a bright idea to reduce tax for asset-rich property owners as that means it will lose the votes of the have-nots. And if you haven’t already noticed, this government is pretty short on votes already if the opinion polls are anything to go by.

So plaintive press releases urging Rishi Sunak and Jeremy Hunt to scrap a property tax are not going to shift public or government opinion - but a more clever approach might just work.

There’s clearly growing recognition that the country has too few homes and there’s a perception that younger people are suffering as a consequence.

Those who recognise a national housing shortage have felt this way for a long time, but now others are coming on side.

Look, for example, at how some Tory MPs complained when Housing Secretary Michael Gove abolished housing targets; and look too at campaigning organisations like Shelter recognising that although it’s easy to hammer agents and landlords, the long-term solution to a housing shortage is…well…more housing.

So why not focus requests for stamp duty reductions not on all transactions but those that effectively contribute to the housing stock - that is, downsizers.

Polls frequently suggest many older owners who are effectively under-occupying their existing homes by two bedrooms or more actually want to downsize but feel discouraged because of a lack of appropriate homes or the cost of moving - including stamp duty.

Less than three per cent of the UK housing stock of 28m homes is designated as being for retirees - a smaller proportion than many other western countries - and while these types of homes are not loved by every older person, if more were built and had no stamp duty attached to their purchase, more large homes would almost certainly be freed up.

Likewise if older home owners downsize, even if it is to a non-retirement property, why not give them the incentive of paying no stamp duty? If it’s good enough for first time buyers spending up to £450,000, why not for last or nearly-last time buyers aged, say, 65 or over?

A campaign on this by the property industry would capture the zeitgeist. It would help the market but in a way people would not regard as greedy or benefitting the already well off.

That is, it would recognise the overall shortage of homes, help overcome disadvantages hitting younger people, and give a bonus to older owners putting their larger houses into the open market.

This more targeted approach might just work - and would generate far fewer wasted emails in my inbox come the next Budget.