Recent tax increases have significantly raised the cost of stamp duty for UK residents
Homebuyers in Britain have contributed a staggering £5.5 billion to stamp duty this year, a 25% increase from the previous year’s £4.4 billion, as reported by Coventry Building Society.
This uptick follows the April adjustment in the thresholds for tax-free property values, which were reduced from £250,000 to £125,000. Consequently, the average tax on a home has risen to £3,274, a significant leap from the earlier amount of £774.
Stamp duty is a tax levied on home purchases when buying houses, flats, and other real estate above certain price points in the UK. It is applicable when a residential property is priced over £125,000 and £300,000 for first-time homebuyers.
The increasing tax load has added pressure for changes, with calls from both the property and investment sectors to eliminate stamp duties, which are seen as obstacles to the British markets and investment opportunities.
“More than 300 years later we’re still paying it in one form or another, despite the fact the housing market has changed,” Stinton said.
He warned that the substantial tax bills are deterring people from moving home, whether upsizing, downsizing or relocating to properties better suited to their circumstances.
“That kind of strain doesn’t just affect individual buyers, it can slow the market down for everyone,” he added.
Wilson’s research revealed that 72 per cent of retail investors would be more likely to invest in UK shares and trusts if stamp duty were abolished, compared to just 7 per cent who said reducing the cash ISA allowance would make a difference.
“If we’re serious about revitalising the London market, scrapping stamp duty should be top of the chancellor’s to-do list,” Wilson stated.
He criticised the Government’s cautious approach to reform, arguing that eliminating stamp duty on shares represents “one of the fastest, simplest, and boldest things this government could do to shift the dial” in creating a fairer investment landscape.
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Coventry Building Society has sounded the alarm over stamp duty
Nick Leeming, the chairman of Jackson-Stops, has previously called for the Chancellor Rachel Reeves to introduce targeted stamp duty relief for older homeowners.
He said: “Stamp duty is acting as a brake on the housing market, keeping older homeowners in properties that no longer suit their needs and blocking supply for younger families.”
“Our research shows that stamp duty concerns rank alongside the stress and cost of moving as key obstacles preventing older homeowners from downsizing, with over a quarter citing it as making downsizing financially unattractive.
“With the right incentive, such as targeted relief on stamp duty for downsizers, over half a million people are willing to move in the next 12 months. In total, 2.8 million over-55s across England say they would downsize if stamp duty were reduced or removed, revealing the true scale of pent-up demand being held back by current tax policy.”