Reform of stamp duty is rumored to beunder considerationahead of the Autumn Budget, by Chancellor Rachel Reeves
Sources indicate that the Treasury is exploring a new tax on properties valued above £500,000 as part of a significant reform of stamp duty and local taxes.
Meanwhile, Conservative leader Kemi Badenoch really stirred up the situation bycommitting to eliminate the tax completelyat her party's conference last week.
But IndependentReaders are split on whether the tax should be removed, with some claiming its elimination is "fantasy economics" that would merely increase costs.
"One mentioned that when stamp duty was reduced during the pandemic, the surge was so significant that it made it more challenging for first-time buyers," while another cautioned that any savings would simply be used for deposits and contribute to a potential crash.
Many observed that it would "target the extremely wealthy" but "achieve nothing" for tenants or individuals already unable to afford housing.
Possible options under consideration involved new exemptions, increased limits, rebates aimed at "promoting smaller living spaces," or substituting it with a more equitable charge like a luxury property tax.
In general, there was an impression that every choice involved potential dangers – whether it was removing funds from the economy or increasing home prices further by boosting demand.
Here’s what you had to say:
We require individuals with financial influence to take their portion.
If doing away with the stamp duty is included in a plan to fairly tax real estate, that would be positive, but I have my doubtsthisis simply a attention-grabbing phrase with no real content.
Certainly, we all dislike taxes but appreciate the advantages provided by the NHS, roads, and waste collection, among other services. Regrettably, both are necessary, and we also require those with significant assets and financial strength to contribute their fair share instead of leaving the responsibility solely on wage earners. The UK is a wealthy country, it's just that the distribution of these wealth is uneven and this imbalance is increasing rapidly.
SorrySurrey
Appealing to the well-off
Eliminating the stamp duty is intended to attract those with significant wealth, who are expected to face a substantial increase in stamp duty on properties valued over £500k.
It would be completely ineffective in assisting individuals facing difficulties in entering the housing market and would also negatively impact the private rental sector, as home prices would rise and unscrupulous landlords aiming to grow their property investments would increase rents to offset their higher borrowing costs.
The Greens certainly secured victory in the Conference season with their bold yet OUTSTANDING plan to expand the right to buy to the private rental sector, offering tenants a growing discount and priority purchase option when a landlord lists a rental property for sale.
If tenants do not want to or are unable to purchase, the next priority is local authorities, who can gradually restore their social housing inventory and reduce their extensive housing waiting lists.
CanPeopleReallyBeThisStupid
Fantasy economics
Some rumors suggested that Reeves was thinking about changing the stamp duty or replacing it with another system long before the Tory conference, so I believe the person who likely stole the idea is Kemi Badenoch.
However, abolishing something without establishing a new tax to take its place appears to be unrealistic economics and a fast track to increasing home prices. Badenoch's statement seemed more similar to the previous election's unfunded Conservative National Insurance Contributions reduction.
Tanaquil2
Stamp duty’s dual purpose
Land transfer tax appears to serve two functions: a method of generating revenue—although all taxes are essentially taxes on income, making it a hidden form of income tax—and a means of controlling property prices by removing these taxes from the real estate market.
The latter is essential because the shortage of housing drives up property prices, which eventually crash when interest rates increase. Eliminating stamp duty without constructing more homes is inviting problems and won't benefit anyone. It simply means that the money previously used for stamp duty will now be directed toward deposits, thereby increasing house prices... setting the stage for a collapse.
much0ado
Encourage downsizing instead
If stamp duty is preventing homeowners from moving to smaller homes, keeping family homes off the market, and causing people to remain in properties that are larger than they need, the solution is simply to adjust the tax to promote downsizing. (Downsizing refers to moving to a property with less square footage or fewer bedrooms, not relocating from a high-value area to a more affordable one.) Perhaps introduce a percentage discount based on the difference between the sale price of a more expensive home and the purchase price of a smaller one?
Pedrobear
What are the advantages of ceasing it?
When the stamp duty was briefly reduced during the COVID-19 pandemic, it led to a significant rise in home prices, making it more challenging for first-time buyers to enter the market.
I'm uncertain about the remarkable advantages of quitting it.
Naa27
House price inflation risk
Previous stamp duty holidays caused house prices to increase, resulting in buyers paying almost the same amount, being less likely to qualify for a mortgage, and needing a bigger deposit. Maybe a more restricted adjustment to promote moving down, particularly among older individuals.
Alexander Boris de Pfeffel Johnson
Boosting production is the answer
Lowering or eliminating stamp duty will only cause prices to rise. The best approach to making housing more affordable is to boost the availability of properties, especially social housing.
BeigeDave
Meaningless nonsense
Most individuals understand that eliminating stamp duty is unrealistic economic policy. Therefore, why should Reeves feel compelled to address it? The Conservatives lack financial credibility, comparable to Farage's, so any suggestion Badenoch presents now (given how distant it is from an election) is merely immature political maneuvering. I believe Reeves will completely disregard it since it's just empty talk from a politician who isn't taken seriously by anyone.
Tabbers
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