What if Stamp Duty was abolished?

But you can tax the wealthy in many ways. This particular way encourages the wealthy (or property-rich-cash-poor elderly people, of whom there are millions) to take up more property than they need, in places they may no longer need or want to be (near jobs) but that others desperately need.

Why not load that tax onto income tax or land value tax or pretty much any other tax that doesn’t constrict housing supply instead.

They should work on growing the economy (Like they said they would in their manifesto) and bringing in more normal tax rather than twiddling with things.

I would prefer them to lower the NI rates for employers and look at ways to grow the economy rather than crush it.

I wouldn't trust Labour to water a house plant.

Obviously SDLT affects people who are purchasing valuable properties more but I don’t think the OP is arguing that wealthy people should be taxed less, but rather that choosing to tax them for moving creates perverse incentives and is not good for our housing market. Tax them in different ways (like for holding the asset via reformed council tax for example)

I have a three bedroom bungalow with a decent garden and I want to move to a wheelchair accessible bungalow with a decent garden nearer to my work.

The two properties are on paper the same price, but after I pay stamp duty and estate agents’ fees, plus solicitors, I can’t afford to move to a house that is supposedly the same price as mine, just with proper modifications for me to be comfortable there.

The whole system seems mad - I agree that there need to be changes but from a personal point of view an exemption for adapted properties like the exemption on VAT for aids and equipment is what would help the most.

Yes, this is just what we need, house prices to increase even more.

In which case this is wealthy people asking for tax breaks. Tough. I am moving soon and will pay £100 SDLT, which is more representative of the UK population.

So the lesson I’ve learned in this thread is that London and the SE fucks the system entirely due to the skewed property prices.
I live in Scotland and our LLBT is significantly more than in England, it’s a pita but we aren’t all trying to offload houses that are in the millions of pounds price point.
With that in mind I’ll just mute the thread because my heart just breaks for you all.

But why would you bother? If it’s good for people to downsize, let them do it twice!

House prices would just rise, instead of the money going to the government, it would go to the banks instead.

No real change, no extra money in your pocket

@Icanttakethisanymore

If each person could sell once, specifically to downsize, after the age of 65, it might smooth the housing market

This sounds like an administrative nightmare!

And yet they manage it for first time buyers....

These are the people who typically benefit from massively increased housing prices though. It should perhaps be covered by capital gains instead, but many people have massively profitted from owning property. That profit should be taxable.

You think stamp duty is expensive in the UK - try spain! Mine was nearly 10% of the purchase price and solicitors fees were about €8k. And if you sell your main residence, you have to buy a new one in spain within 2 years or pay capital gains tax on the profits. If there are any as most real estate agents charge 5%…

I want a two bed bungalow with a small garden.

Where I live, that's about £600k. They are in huge demand for obvious reasons. My alternative is to buy a small plot of land and have it built myself. That's unlikely to save me much, after architects, contractors, land values & bridging loan.

I've tried to get planning permission to divide my existing house and garden into two flats and have been turned down.

So I'll stay where i am until a sensible alternative presents itself.

A £2m property (for someone who only owns one home) would attract a 150k SDLT bill. Very common in London.

ETA - make that 1.6m if you have an additional property.

You're not seriously saying your SDLT would amount to £150k?

@Dingledongledell

it would need to be far higher to replace stamp duty and standard council tax. We are already paying just shy of £3k on a £450k house per year!

My point is - if a downsizer is a good thing for the housing market then it's a good thing whatever their age, so I am not sure why you'd limit it. This would also create a massive disincentive for anyone who is approaching 65 to downsize (when they might have otherwise). 'Cliff edges' in tax thresholds (or in the case age is applies) tends to have quite a corrupting influence on peoples behaviour.

If each person could sell once, specifically to downsize, after the age of 65, it might smooth the housing market

This sounds like an administrative nightmare!

Why should someone like me, (who can't even afford the deposit for my own property, and am forced to rent), be burdened with higher council tax, just so people like you can save on your tax duty?!

Stamp duty should be reformed imo, keep it for second homes and foreign buyers but it should be scrapped if you're buying a residential property.

If council tax reform happened I'd have to sell up as I couldn't afford to pay 0.5% of my property (I'm in London)

How about a 100% tax on estate agents commission ?

Excellent idea, my house hunting budget just expanded. What’s your idea for replacement tax to raise revenue to pay the UK’s hideous benefit bill? Maybe higher taxes for lower and middle earners?

But that would be less than I currently pay in council tax. So you’ve now cut tax take on two fronts. Where are you increasing tax to compensate?

@Gnarab24

How is that a benefit?

You are claiming that abolishing SDLT would leave prices unchanged and therefore there is no benefit, but I don’t think that stands up to scrutiny.

If the waiter delivers the wrong dishes to everyone at the table, then you benefit from swapping them around so that everyone has the one they want, even if the restaurant doesn’t knock anything off the bill.

Evidence from short-term SDLT holidays suggests that 60-90% of the tax save gets translated into increased base price. So after-tax prices do fall, by a percent or two. Not massive but not nothing.

It should also increase fundamental supply, by reducing the number of spare rooms. Also a good thing.

Hard to model though — if you let people move to where they want to be more easily then those places become more vibrant/attractive (deeper networks), which itself may push up prices.

Because freeing up large family houses will enable everyone else to move up when they need extra space, without building millions of extra 4 & 5 bed houses which is what Labour had planned, but does not have the workforce to deliver.

If each person could sell once, specifically to downsize, after the age of 65, it might smooth the housing market, reduce the amount of building necessary and enable councils to be paid for residential care, faster. Older people could move into smaller, more accessible homes, making care in the home easier too.

It would make the whole process more efficient.