Should stamp duty be abolished to help the housing market?

[Dorothyperky]

Nothing is selling in our area over £500k (south).

Every agent near us is seeing less sales and fewer instructions.

Also would it make a difference to you?

in fairness when a care home costs £6k+ per month per person, no wonder they want the most amount of money for an elderly relative that they can get!

That looking at it on a micro level and you say is a perception not a reality. What about if you want to move again or those trying to get on the ladder - house prices increases at a time of general economic stagnation are not good.

And make no mistake the government will have to get that those billions from elsewhere.

Honestly I am no fan of stamp duty at all and it stops me moving as much as anyone else. It just isn’t the simple fix people think.

But if people aren’t moving or able to sell the govt isn’t getting this “income” anyway.

SDLT is a blight. It's a clumbsy and unnecessary friction on transactions.

The discussion has been had before. Remove SDLT and Council Tax and replace with an annual Home Value Tax and Poll Tax. That'll soon sort out house prices and free up larger homes for families.

So? They couldn’t move . And yet “randoms on the internet” tell them they should just use their non-existent equity to move. Do you want elderly people to downsize or not?

When I sold my aunts place (post COVID) there were 19 offers with 4 days. It was a different market.

@Ventress what are you misunderstanding?

You’re assuming the stamp duty issue is just linked to price ie my £900k house will now be - £940k house inc stamp duty - so what’s the issue?

It’s about the price of a transaction, and losing money with each one - which incentivises people to transact less.

This then reduces liquidity in the housing market - as there are less transactions occurring.

Im not going to move and spend £100k on stamp duty (which I don’t get back - it’s not added onto the price to be spent again in future when I sell), if I think I may want to move again in 5 years… and attract another £100k stamp duty bill.

If house prices increased to absorb lack of stamp duty, I would still own an asset at that value. With stamp duty I lose that value.

No, if houses aren’t selling it’s generally because they are overpriced. Housing market is overheated over the years and needs to reset. People need to stop assuming that their house is the equivalent of a cash cow because it isn’t. The bands need to be re-organised but the principle is simply another way of generating income for the government.

Yes

If house prices increased to absorb lack of stamp duty, I would still own an asset at that value. With stamp duty I lose that value

But there isn’t a guarantee that the asset will hold its value.

That’s a different and unrelated issue.

The transaction is what causes me to lose money, so I can incentivised to limit the number of transactions.

I can’t control the price my house sells for based on market forces - I can control not losing £100,000 by opting to not move house.

Stamp duty’s real flaw is its impact on transaction volume (as it is this which is taxed), not its impact on house prices.

When it impacts house prices in when it is temporarily paused which causes a flood of activity - removing it entirely wouldn’t cause this pressure. Prices would adjust to reflect affordability, but then that should remain stable.

Do you think most people are paying for that extra out of cash? No for most it’s debt with interest paid over many years. This matters. You’re also thinking of micros (ie one example) not macros (the whole market overtime).

I’d be all for scrapping it if the economy was booming (providing more tax from other sources) and shortage of housing wasn’t such a strong lever.

Anyway I have to start work in 2 minutes!!

We are looking to downsize. The money we’d make would be for the kids to help them buy a house. So I do resent the SD. It will come to it eventually but we’re staying put for now as DCs still in uni or first rentals/unsure of eventual location. There may be a better way of planning for this but we’ve never had any big sums to think about (apart from two good wages).

It’s not a micro example - it’s a widely understood limitation of stamp duty. Particularly in the south east where the cost of it can be huge for quite ordinary family homes.

Whichever way you cut it - you need to earn the money to pay for the stamp duty, if saving it up to pay it or using mortgage debt to do so.

The stamp duty sum is effectively lost wherever you think the capital used to pay for it came from. On day one you had eg £940k of assets, on buying a property you have £900k. Move again and… you need another £40k. Etc.

I think that stamp duty lately has become obscene. There was a rush to complete purchases on 31 March 2025 due to changes (a relative completed on that day).

If you buy a 600k flat/house as your main home, stamp duty is 20k. That’s a serious chunk of money. If you buy that same flat/house as your 2nd or BTL or whatever, the stamp duty is 50k. That is absolutely eye watering. And the govt thinks they can just pocket people’s money for doing absolutely nothing. I haven’t moved for 20 years and have never paid anything like that kind of money in stamp duty. It’s now a serious deterrent to moving. In days gone by, people were always encourage to extend their reach financially when buying a house as much as they could. These days, it’s better to stay in a smaller property and get clever space saving solutions inside it. Also there will be a focus on having a smaller property that you’ve made really nice inside, rather than stretching to a big one

the govt have got far too greedy with this tax and it’s now just a case of taking it because they can, not because it’s in any way warranted at these levels.

what I really want to know is how the govt is squandering such large amounts of stamp duty

@LasVegass but that doesn’t change my point that downsizes tend to have the most equity.

This. Exactly. Captital gains tax makes sense. A tax on moving doesn't.

No! Dont stop building houses. We need houses.

The transaction is what causes me to lose money, so I can incentivised to limit the number of transactions.

But the price of housing to wages does that already.

When it impacts house prices in when it is temporarily paused which causes a flood of activity - removing it entirely wouldn’t cause this pressure. Prices would adjust to reflect affordability, but then that should remain stable

Im not sure I agree that housing wouldn’t just increase. How can you be certain prices would adjust to reflect affordability? They haven’t done that for a long time because it’s a very distorted market.

And what tax would you replace it with?

Yes, obviously. But in my example it’d allow three others to buy their first property too (with a mortgage in DC’s case). So you’d have a bit of movement.

Bringing taxes on non-labour income more in line with total effective taxes on labour income (incl NI). Increasing inheritance tax.

And lower house prices relative to incomes would be a good thing.

@LasVegass but that shows how distorted it is. Young people should be able to buy without so much help.

Ever increasing house prices have damaged the economy & disproportionately impacted young people.

What do you mean - “But the price of housing to wages already does that”? I’m not sure you’re grasping that the issue is the tax on the transaction…

Regarding prices increases - I say removing stamp duty will increase prices initially as the value of the stamp duty is absorbed into what people are able to pay. But - that the removal of a tax / loss at the point of transaction means people will be more willing and able to move.

The ones just starting out will actually pay less in stamp duty as first time buyers don't have to pay anything until the house is over £300k I think
Annoyingly I want to downsize from 3 bed house to 2 bed bungalow in my 30s because of health conditions and that would mean increasing my mortgage and then also a massive chunk on top for stamp duty. It's the stamp duty that I'm currently having to wait to save as it's a push too far on the estate agent fees and then solicitors for both selling and buying to then come up with thousands on top for the stamp duty