The House of Lords committee on intergenerational fairness has called on the government to reform stamp duty, among other things, in a wide-ranging report published today.
In its report, the committee highlighted that stamp duty “has seriously distorted the housing market” and has urged the government to “review the effect of stamp duty on the liquidity of the housing market”. Alongside this, the committee wants government to investigate how stamp duty could be reformed “to improve the housing choices and availability for young families”.
Providing her opinion, Centre for Economic Justice chief economist Carys Roberts emphasised that she had “never met an economist who think that stamp duty is a good tax”, while the House of Lords economic affairs committee chair Lord Forsyth added that stamp duty in the capital has “brought some sections of the housing market to a complete dead stop”.
Furthermore, the Association of Accounting Technicians, which provided written evidence to the committee, has suggested for a while that transferring stamp duty liability from the buyer to the seller would save taxpayers £670m per year by 2021, as per its report published in September of last year.
Commenting, Just mortgages and Spicerhaart group operations director John Phillips argued that many people who want to upsize are opting to extend instead, since stamp duty tax “makes up such a huge proportion of the cost of moving”.
“There is an argument that of course stamp duty brings in valuable income for public spending – about £8billion a year – which sounds like a lot. But what about the costs associated with people not moving because of stamp duty costs? For example, older people living in homes unsuitable for their needs which adds extra pressure to health and social services.
“In my opinion, stamp duty has a lot to answer for, so I welcome this report’s findings. Stamp duty is stifling the market and is long overdue a huge overhaul - ideally, it would be abolished altogether, but significant cuts would be a good start,” Phillips concluded.
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