A panel of property experts has told MPs said there is a “strong case” for abolishing Stamp Duty Land Tax (SDLT).
Appearing at a treasury select committee to discuss the topic of property taxation were Zoopla executive director Richard Donnell, Kate Willis, from the Chartered Institute of Taxation (CIOT), Professor Tim Leunig from Public First Consulting, and Kirstie Alsopp, TV presenter and property expert.
A key recommendation was the abolition of SDLT to support more home moves and boost economic growth.
Mr Donnell said the cost of moving was a key barrier for homebuyers particularly in southern England where home values are higher.
However, while many are calling for SDLT to be abolished altogether, Donnell warned the challenge was to find the £11 billion it raises a year from other sources.
With the budget coming up before the end of the month, the chancellor is looking at ways to fill the fiscal black hole and the taxing of property has featured in several proposals.
Mr Donnell said: “Property is not the place to look for quick wins on taxation, but there is a strong case for longer term reforms that see the removal of stamp duty and the introduction of a proportional property tax that replaces council tax and eases the barriers to home moves.”
Sheldon Bosley Knight’s Stratford sales manager Lisa Hunt (pictured below) said there were pros and cons to the idea.
She said: “It unlocks the market so as agents, this is undoubtedly the biggest benefit. It also encourages downsizing, boost the local economy and improves mobility.
“The cons include revenue replacement as stamp duty generates billions for the treasury and if it’s abolished this money must come from elsewhere. There is also the risk of price inflation and no long-term stability.
“For the Stratford market, abolition would certainly generate immediate activity, especially for premium homes where the SDLT bill is substantial. However, any long-term benefit depends entirely on how the lost revenue is replaced—if it’s replaced by a higher annual property tax, it could make homeownership more expensive year-on-year, particularly in high-value areas like ours.”
Market Harborough sales manager Sally Wykes (pictured above) said: “In Market Harborough we have noticed the market becoming more nervous in the lead up to the budget. The delay in timescales has not done the property market any favours and so some drastic action like abolishing stamp duty would be a welcome and much needed boost.
“My only reservation, however, is this would only be a temporary measure and although it would kick start the market and bring an immediate return to confidence, would it be a case of delaying the inevitable and just postponing a bigger issue for a later date?
“I feel more work to reduce the cost of borrowing for mortgage buyers by reducing interest rates and perhaps the return of a scheme like the government’s Help to Buy scheme, would be more beneficial long term.
“Addressing the cost-of-living crisis and making life in general more affordable, would also be better for the wider economy I feel, as moving house is a luxury that many simply cannot afford right now.”