What if Stamp Duty was abolished?

That would be grossly unfair. Downsizing usually releases equity so these people are in a better position to pay it. It would also feed intergenerational resentment.

What if stamp duty was only for buying a bigger house, not for downsizing?

Because council tax pays for local services provided by your council and stamp duty goes to the Treasury. If we moved the stamp duty would be equivalent to roughly three years council tax.

Why should I pay more council tax when I’ve already paid so much in SD? My CT is already 11% of my wage…

Yes you could charge like that but it doesn’t reflect capital gains
That’s much the same as pricing a planning application.

It’s not actually that difficult. HMRC do this type of calc for cgtax already so there’s no change required . You simply provide evidence of build costs.
For cgtax it’s all done online and you pay straight away.

That’s ridiculous tbh. The build costs of an extension are not as simple as just saying x. How are you going to evidence all this.

It’s simpler to say permitted development now requires a form. Its surcharge is x per sqm payable to receive your permit.

Not really @Nchangeo

The only current problem is that not all extensions need planning. They can use permitted developement.
They do need building regs though and can’t sell without approved building regs

If before works are allowed to start planners are provided with a simple form. ie Existing property size and proposed property size for the developement then HmRC can put an alert on Landregistry
( they already do this when you buy a second property to make sure they get their cgtax when you sell these days that second property tax introduction wasn’t just for the extra stamp duty ).

So as soon as a house sells HMRC get an alert via LRegistry

If you haven’t declared to your conveyancer you’ve extended HMRC will catch you anyway via the alert.

In terms of how much the uplift is due to the developement a simple £/m2 on sale could be used then deduct build cost

So Existing size 200m2
New size 300m2

Sold price £600,000 ie £200,000 for the extension as it’s 1/3rd of the property
Build cost £180,000
So the profit is £20,000 and due tax
If its declared at the point of sale it gets paid just like stamp duty and conveyancer fees.
If not you get caught by HMRC pay the tax owing plus a fine and their standard interest rate on the bill ( currently 17% ) as it would be classed as fraud

You could put in a development fee then. At planning sign off stage. Similar to a community levy.

But capital gains isn’t going to be able to distinguish between added value from fixing what you live in and someone doing an extension. That’s too complicated to administer.

We ‘re not communists

Just another wealth tax and we know they don’t work

Perhaps stop the reduction for single occupancy with the exception of those with kids. That might get people moving out of larger houses if they’re on their own.

But that’s all just another tax and not relevant to stamp duty.
Council tax goes to local councils. Each one raises it on need
Currently the biggest chunk goes to adult social care which is why Labour are looking to change the parameters for mental health ( now I’ve derailed)

I’d rather if people are buying and can’t because of stamp duty costs they pay Hmrc back over a period of time plus their standard default interest rate. Or lower probably as it would be wrong to fine them on a high rate I suppose.

So you expect an elderly couple in a one bed flat in London to pay more than a family in a five bed detached up north, just because their flat is of higher value?

Easy to encourage financial service providers to develop products which provide loans specifically for this purpose against the home equity, repaid from the estate. Also reduces wealth inequality where some people inherit ludicrous amounts due to absurd unearned gains because their parents happened to buy a cheap semi in kilburn in 1978.

Oh and honestly? Get rid of separate CGT rates. In plenty of other countries capital gains are just taxed at the same rates as other income. It would actually simplify the tax code to do the same here. You can easily have indexation calculations for inflation - calculators could be put on the hmrc website.

SDLT brings in £18b/year, how should the government raise the shortfall if it is abolished?

Where have you found 18bn? Residential transactions fy25 was about 8bn.

Council tax is expected to bring in 50bn in fy26.

You could revamp the bands & raise the upper cap on council tax so that all the very large, high valued properties in london (including buckingham palace) pay more (so that it is no longer regressive, with poorer owners of cheap terraces paying relatively more than wealthy owners of mansions). Could quite easily cover the 8bn. The better off can afford to pay £5k council tax p.a instead of £3k, and I include myself in that.

I'd also replace council tax with a centralised version so that it can be redistributed to poorer areas rather than keeping rich areas rich.

https://www.gov.uk/government/statistics/quarterly-stamp-duty-land-tax-sdlt-statistics/quarterly-stamp-duty-land-tax-sdlt-statistics-commentary#residential-transactions

Edited to add link to some stats.

I wonder whether people could be given a choice - no stamp duty to pay but you will have to pay annual property taxes instead as long as you’re a home owner.

It’s crazy to penalise people for selling their home. I would 100% pay a higher annual property tax to cover the loss to the treasury.

People wouldn't move though because they’d lose money
They would stay and die there

There’s no cgtax when you die just IHT
So people will stay in their homes and pay IHT on death. No point moving and paying cgtax on a move then IHT on death
All on your family home
The market would become stunted and families would be waiting it out for a probate property

Taxing a properties rise in value when you’ve done nothing to it other than live in it is not income. It’s inflation

Crap properties with no doors. No floors and pebble dashed ceiling. Yep.
Like me

Thats different a rotting piece of housing stock brought back on the market is a good thing.

A property extended out of range of people’s pockets is another.
Extending property does make money. If £/m/ sale is £4000/£5000 ( my atea atm ) and it costs £2500 /m2 building ( costs atm SEast ) You’re making money
If you do a lot of the work yourself you’re making even more

It is developing.
It’s currently an untaxed income that involves work.

People don’t like the idea because people have being over extending the life out of our housing stock for quite the few years now.
You work and make money
You pay tax.
Just Like everyone else.

Ps
Like everything. If you don’t make money. You don’t pay tax.

I act for plenty of purchasers who specifically purchase property via a share purchase rather than purchasing from an individual (ie but the company that owns the property rather than buying the property from an individual) because stamp duty on shares is so much less than SDLT. Maybe for individuals buying shares (even then it’s over £1000 so even if you bought £15,000 you’d be paying £75 in tax), but buying and selling companies is a booming business!

it seems this would incentivise moving and would certainly help me and my husband, but again I think this punishes the elderly for staying in one place for so long. What my parents bought their house for, now isn’t even a decent deposit for a small flat!

What a ridiculous idea. Lots of people are asset rich, cash poor. So you expect an elderly couple in a one bed flat in London to pay more than a family in a five bed detached up north, just because their flat is of higher value? How can they possibly downsize?
I am already paying 4k for a G band. Biggest rip off ever. We get very little for our money.

Yes it should be scrapped. Make up any shortfall with an immediate increase on council tax if necessary.

It's not just property though - e.g buying shares in UK companies face an 0.5% stamp duty upon purchase...so nobody who has an ISA buys shares in UK companies, and instead buys shares in USA companies which are not subject to Stamp duty - it's the most stupid tax imaginable.

The more I think about it the more I think your right.

That makes even less sense. It’s more expensive atm to extend than the floor space is worth.

And that’s not even what I am talking about. I am talking about mainly young people with energy who buy absolute shitholes, with no central heating, ceiling falling in, broken kitchens leaking bathrooms etc.

All the way down to people who buy something crap and do it up mainly through their own hard work and diy.

Both huge undertakings. Taxing capital gains on these means people won’t even get back what they spent. Let alone any extra for the time and effort taken.

What do we do then? Just knock down houses and start again?

It may be more sensible than a wealth tax in the sense that it’s easier to administer but if you’re positing that SDLT stifles the market, surely CGT on main residences will do exactly the same?