Stamp Duty hinders potential downsizers and investors
When the government scrapped stamp duty for the vast majority of first-time buyers in 2017, the move was broadly welcomed – and it helped to boost first-time buyer levels significantly last year.
But what about the wider market? Some commentators believe that Stamp Duty is proving a hindrance to the UK housing market, and should be overhauled to boost transaction numbers.
Specifically, the tax prevents some older people from downsizing, according to When You Move.
Many of these homeowners are asset rich but cash poor, and the stamp duty they would have to pay to purchase a more suitable home for their needs is often unaffordable.
As a result, the homemoving platform is now calling for a belts and braces reform of Stamp Duty to help the housing market.
It notes that second homeowners are similarly stifled, faced with a 3% stamp duty surcharge. The extra tax has had a significant impact on the buy-to-let purchase market, which is reeling from a raft of other measures that have dented landlord profitability in recent years.
The firm said that the government needs to do more to encourage homebuying and selling activity.
When You Move’s CEO, Simon Bath, said: “The home buying and selling process is fundamental to the prosperity of our economy. However, Stamp Duty is serving as an hindrance to homeownership in the UK.
“The government has eliminated the financial hurdle of Stamp Duty for most first-time buyers, but the same needs to be enforced for those looking to secure a retirement home.
“We cannot leave a key demographic of society behind when encouraging activity in an otherwise stagnant market, without expecting it to have an impact on the rate of completed property transactions.”