House prices: Should sellers pay stamp duty charges?
09-23-2016
Change in system would counter Brexit slowdown and help first-time buyers, says Yorkshire Building Society
A radical change to stamp duty rules to shift the burden on to those selling their home would counter any Brexit-related housing market slowdown, Yorkshire Building Society claims.
Chief economist Andrew McPhillips told The Times the policy would lead to 16,000 more transactions and particularly help first-time buyers.
There have been fears the property market would slow down markedly in the wake of the vote for Brexit at the end of June, amid a prolonged period of economic uncertainty.
Investment and overseas buyers would be the first to step back, which could slow growth in house prices or even turn them negative. This in turn could prompt more prospective sellers to hold on to properties for longer.
An alternative scenario, which preliminary data since the EU referendum would appear to support, is that because a slowdown in activity would further constrain housing supply, it will hold prices higher.
McPhillips said the change would exempt first-time buyers completely, saving them an average of £3,791 in England and £13,171 in London. Those moving home to "upsize" would also save around £4,000.
Based on the impact of the stamp duty "holiday" in 2009, this could increase transactions by around two per cent, boosting Treasury receipts overall by £156m.
However, Yorkshire also wants the government to cancel stamp duty on new-build homes to stop developers upping prices to offset the tax charge, which could cost the government £800m.
Paula Higgins, the chief executive of campaign group the Homeowner's Alliance, told the Daily Telegraph: "Stamp duty is a huge barrier for people trying to move. If they're paying it on the property they're coming from then it'll be cheaper and it'll stop people staying in homes that aren't suitable for them, which clogs up the system."
However, both Higgins and McPhillips acknowledge the policy would also put a much higher tax burden onto older homeowners looking to downsize.
Business Insider says this would ultimately be damaging as it would persuade more of the country's biggest home-owning demographic to hold on to their properties to pass on down the generations, further constraining supply.