A survey has found that there is strong demand for Stamp Duty Land Tax (SDLT) to be reformed or replaced among homemovers.
The Anthony Ward Thomas Attitudes to Moving survey asked 2,000 homemovers several questions about their experience of moving and their thoughts on the housing market.
The survey found 38% of respondents think SDLT should be replaced by capital gains tax on all sales.
58% also believed that first time buyers should be wholly exempt from SDLT, a step beyond the current exemption on purchases below £300,000 for first time buyers.
Anthony Ward Thomas, founder of Anthony Ward Thomas removals, said:
“First-time buyers are the lifeblood of the housing market, and we need plenty of them to keep everything functioning smoothly further up the ladder. However, the cost of moving is in danger of running away from them – it’s not just about finding a deposit and having a big enough salary to get the mortgage you need, there are all the other moving costs, such as stamp duty.
Replacing a tax on buying – stamp duty – with one on selling – CGT – makes a lot of sense. Buyers will already have profited from the increase in value of their home so paying a tax on that, rather than at the point of entry, seems much fairer.”
This comes as MPs recently demanded that Chancellor Rishi Sunak cut or remove the tax, with 1.2 million homes becoming liable since the start of the pandemic.
Alongside this, 4.3 million homes have been pushed into higher rates, according to new research from Zoopla, who say that the average house price has increased by around £29,000 since the start of the pandemic to £249,700.
This has caused Conservative MPs to call for the tax to be cut or removed, despite the tax bringing in £18.6 billion in the 12 months leading to March 2022 – a rise of £6.1 billion despite the SDLT holiday.
Sir John Redwood MP said:
“It is a tax on people improving themselves, on levelling up and on making sure through the marketplace that the right people are living in the right houses as it puts people off trading up or down into a size that is more convenient. It is a bad tax.”
Greg Smith MP said:
“My view is that stamp duty is one of those taxes that we should look at getting rid of altogether. In terms of yield for the Treasury, it is significant but not insurmountable.
As a priority, there needs to be a revaluation of where the various boundaries lock in. It is just preposterous that 4.3 million should lose a big chunk of their ability to move up the ladder.”
Kevin Hollinrake of the Treasury select committee said stamp duty was a “disincentive to transact, which is bad for the economy”. He went on to note that the initial £125,000 SDLT threshold could be removed, which would, to an extent, make permanent the SDLT holiday.
Average houses in 11 local authorities are now seeing SDLT levied for the first time, and 56 authorities have seen the average house move up into a higher SDLT bracket since March 2020.
