Yorkshire Building Society says reversing the traditional stamp duty rules would help first-time buyers
People selling their homes should pay stamp duty on the sale, instead of the people buying them, Yorkshire Building Society has proposed.
It is calling on the government to switch the tax burden to the seller, as it says doing so would save would-be buyers almost £3,800 and help them buy their first home 15 months sooner.
Those moving up the property ladder would also benefit to the tune of £4,100, rising to almost £9,800 in London.
The change would also drive an extra 16,000 home transactions in the first year, earning the government £156 million more in the process.
In the last year, around 75% of first-timers paid stamp duty, which is payable on all properties worth more than £125,000.
‘Making homes more affordable’
Andrew McPhillips, Chief Economist at Yorkshire Building Society, said: “More than 200,000 first time buyers paid stamp duty last year and removing this tax burden from them would give the younger generation a major leg up the property ladder.
“This would be felt most of all in London where on average our members pay a staggering £13,171 in stamp duty for a first home.
“The benefits would not only be felt by those looking to get on the property ladder as anyone moving up it would be better off too.
“The Prime Minister has pledged to make intergenerational support a key measure of her government’s housing agenda and this measure could achieve exactly that.
“This will not solve every cause of the housing crisis but reforming stamp duty could ease its effects by making homes more affordable.”
Will the government tinker with stamp duty again?
If the building society’s calculations are correct, an extra £156 million in stamp duty revenues would certainly appeal to the government.
We’ve already seen that it’s more than happy to tinker with the tax: in 2014, it scrapped the hated ‘slab’ system where the amount jumped rapidly at each payment threshold, and replaced it with a gradual increase.
More recently, the government introduced an additional 3% surcharge for anyone buying a second home in the UK.