"Scrapping it would remove a huge amount of tax revenue from the Treasury so is unlikely unless it is replaced by a new/increased tax elsewhere."
Newspage asked brokers and other property experts for their views on the current stamp duty system.
Imran Hussain, director at Harmony Financial Services: "I am fully behind the idea of scrapping stamp duty entirely to allow more mobility within the property market, as there are many people who are now refusing to move from homes that no longer serve them a purpose simply due to the hefty stamp duty bill they will incur even if they decide to downsize. Scrapping stamp duty for residential purchases would allow more first-time buyers to get onto the housing ladder and more needs to be done to build affordable housing."
Rob Peters, principal at Simple Fast Mortgage: "There's more chance of Donald Trump being the next UK Prime Minister than the Government scrapping stamp duty. This Government has already demonstrated they will increase taxes no matter the push back. The removal of stamp duty would see 14 billion in lost taxes according to the 2021/2022 figures. Where will that money come from? The UK housing system needs a radical overhaul. It's splintered and fragmented in almost every area. Simply tinkering with taxation or offering a short-term fix only serves political agendas, and doesn't provide a long-term solution for future generations."
Scott Taylor-Barr, financial adviser at Carl Summers Financial Services: "The move from the old "slab tax" system that used to be in place to the graduated tax we have now was already a massive move forward in terms of the way SDLT (Stamp Duty Land Tax) works and was very much welcomed. Since then, other factors have been introduced that do make it more complex, such as second home additional charges and exemptions for first-time buyers to a certain limit. The chances of any large-scale changes in the near future are slim. Scrapping it would remove a huge amount of tax revenue from the Treasury so is unlikely unless it is replaced by a new/increased tax elsewhere. The one area that could be a good move for the public, but less so for the Treasury, would be to increase the thresholds for each SDLT banding by the annual national house price growth each April; at present, the limits are reviewed very rarely and therefore the tax captures more and more people in the higher bands as house prices increase, but the tax bandings remain static. This is a trick called fiscal drag, which generates increased tax revenue each year, but without increasing the underlaying tax rate."
Rhys Schofield, managing director at Peak Money: "I'm certainly in the 'scrap stamp duty unless you own multiple properties' camp. The cost of stamp duty simply wastes too much money for a lot of would be home sellers to contemplate moving. We want people moving around, moving into appropriate housing, whilst freeing up their property for someone best suited to buy that specific property. A healthy market is a fluid market but stamp duty scuppers that."
Lewis Shaw, founder and mortgage expert at Shaw Financial Services: "The UK tax system is broken, fragmented, often unfair and unfit for purpose, none more so than Stamp Duty Land Tax. However, tinkering at the edges, talk of fiddling with bandings, or the rate at which SDLT starts will not change the game. We need radical thinking for a digital age that promotes growth, is equitable for all, and supports vital public services. A land value tax would reduce bureaucracy with the administration of taxes, which would mean civil servants could be redeployed to deal with the problems of Brexit. It would stop land banking by developers, forcing them to build to realise a profit or sell it to someone that will, increasing house building and solving the housing crisis while preventing housing bubbles. It would turbocharge economic growth as the drag of tax on productivity and investment would be removed because the corporate tax would be a thing of the past, meaning global investment would pour in. It would naturally solve the UK's geographic inequality because situating a business where land is cheaper would be the sensible thing to do. Typically the north of England would become very attractive due to lower land values. As companies move to those areas, the government would have to build high-quality infrastructure, which in and of itself would also help to grow our economy. Finally, it prevents the offshoring of wealth as you can’t physically move the UK to the Cayman Islands; however, it would take a bold chancellor to make those changes, so it’ll likely be more of the same and lo and behold, we’ll continue to get the same outcomes; sclerotic growth, more food banks and more significant division across society."
Graham Cox, director at SelfEmployedMortgageHub.com: "The current levels of stamp duty seem fair. First-time buyers get a leg up with no SDLT on the first £300,000 and landlords and buyers of more expensive properties pay the most. Should it be replaced? Perhaps with higher rates of capital gains tax for additional homeowners to encourage investment away from property and into more productive asset classes, like businesses. But all those billions in stamp duty would have to be replaced one way or another."
