03/10/2022
Time to be bold with stamp duty?
The government should abolish stamp duty for those buying a home to live in. Currently it’s a tax on transactions and so results in fewer of them, dampening the housing market and means that people don’t move even when they would like to. It is inefficient and deserves to go.
By abolishing stamp duty the market would be allowed to find its natural equilibrium. People would be able to move when they want to and the number of transactions would increase. There would be more chance for people to move up the market and therefore it would be easier for first-time buyers to get into the market.
It will help those older people wanting to downsize and free up capital, but haven’t as they have to pay stamp duty on a new purchase.
Obviously, this would result in a massive decrease in tax revenue for the government but perhaps not as much as anticipated as more people would be moving, generating demand for home improvements and property services, including removals, estate agents, conveyancing solicitors, etc. Lost revenues could be recouped with a corresponding increase in other property taxes that are more efficient – for example the rejigging of council tax could be a good place to start.