House sellers “should pay stamp duty”

UK building society says stamp duty should be tax on property sellers rather than buyers, to help those trying to get on ladder.

The Yorkshire Building Society has said that stamp duty should be a tax on property sellers, rather than buyers, to help those who are trying to buy here first home.

According to the major UK building society, nearly three-quarters of first-time buyers now paid the tax compared with just over half in 2006.

Many more buyers were being drawn into the tax as house prices rose but the threshold remained the same.

It is levied on properties of more than £125,000, or £145,000 in Scotland.

The rate steadily increases for more expensive properties.

To keep pace with house price inflation, the stamp duty threshold was increased to £125,000 in 2006.

The threshold outside of Scotland had remained the same since then, despite the fact that the average house price had risen by 35%, the Yorkshire said.

If the tax burden was shifted to sellers, the building society has suggested that first time buyers in the UK could save an average of £3,625, while Londoners could save £13,171.

Those moving up the property ladder could save an average of £4,154 across the UK, and £9,762 in London, it said.

Andrew McPhillips, the Yorkshire’s Chief Economist, said: “In its present form, stamp duty does not suit today’s housing market – it pushes up costs for those looking to buy, exacerbating affordability issues in a market where prices have vastly outpaced wage growth.

“Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder. It would also help those moving up the property ladder, enabling them to move to a more suitable property and potentially freeing up smaller homes for first-time buyers to purchase.”

This would not solve the housing crisis, he said, but would help if accompanied by a major housebuilding programme.

Figures have shown that the UK government is raising a record amount of tax from property sales.

Chancellor Philip Hammond has been called on to change the tax in his budget on Wednesday.

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