Majority of homeowners believe in SDLT reform, study finds

The majority of homeowners and homebuyers believe that Stamp Duty Land Tax (SDLT) is an outdated form of taxation in need of reform, a new study has found.

Research by Butterfield Mortgages revealed that 58% homeowners and buyers want to see an overhaul of stamp duty, calling it “outdated”, while around two thirds (67%) believe the government should come up with a fairer system to tax property transactions or home ownership.

The mortgage lender commissioned an independent survey of 1,125 homeowners and homebuyers in England and Northern Ireland (NI). It suggested that that SDLT is preventing nearly a quarter of respondents (23%) from getting onto or moving up the property ladder.

Butterfield also found that the majority (70%) of homeowners and buyers in England and NI are in favour of overseas buyers paying a higher SDLT surcharge than the current 2%, while 66% think those buying second homes and investment properties should also have to pay a higher rate, which currently stands at 3%.

Elsewhere, the study showed a strong opposition among homeowners and buyers towards Inheritance Tax (IHT) on real estate. Three in five (62%) feel that IHT should be scrapped for properties that are passed down after someone’s death, given SDLT has already been paid.

“The stamp duty holiday has placed property taxation firmly in the limelight, and our timely research shows there is significant demand among homeowners across England and NI to see a major overhaul of the tax,” said Butterfield Mortgages CEO, Alpa Bhakta.

“Primarily, the majority are hoping for a fairer alternative to be implemented, with greater surcharges targeted at overseas buyers and landlords. Given both groups are already subjected to surcharges but play a key role in driving property investment in the UK, the government will likely be mindful of not introducing much higher taxes for fear of harming the health of the property market or deterring too many prospective buyers, which would only reduce HMRC’s SDLT receipts.

“As the dust settles on the stamp duty holiday and the market readjusts to the new normal, it will be interesting to see how the tax evolves. Stamp duty is always somewhat controversial and therefore subject to continuous reform – we must wait to see what changes are in store next.”

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