Make stamp duty a seller's tax not a buyer's tax to help first time buyers, Treasury told

Homes
Homes

Ministers will be urged to reform stamp duty to make it a seller’s tax rather than a buyer’s tax to kick-start the housing market and give a boost to first time buyers. 

John Stevenson, a Tory MP, will make the case for reform in a Westminster Hall debate, to which the Government will have to respond. 

It would help hundreds of thousands of first time buyers who pay an average of £3,500 stamp duty on their first property or around £10,000 in London where properties are more expensive. 

The Daily Telegraph is campaigning to remove stamp duty amid fears it is stifling the housing market.

Mr Stevenson said his proposals would see stamp duty become a “seller’s tax, not a buyer’s tax” and “help the market” adding that he did not believe sellers would “bump up the price” to cover the cost of the tax.

He said: “In London the stamp duty rates are really knackering the top end of the market.

“This might go some way to helping that as well because it means the person selling the property is paying the tax which might make the buyer more willing to come into the market.” Yorkshire Building Society survey said 60 per cent of people who rent say this would help them to get on the housing ladder.

The building society said reform of the tax is “long overdue” and supported Mr Stevenson’s to more the stamp duty from the buyer to the seller.

It pointed that last year 267,000 first time buyers paid Stamp Duty, a nine per cent increase year on year.

It said: “Everyone recognises, however, that it is also vital to increase the availability of housing.

“If the Chancellor had switched to a sellers’ tax, he could have helped growing families trying to move to a bigger home, which in itself would free up homes for First-Time Buyers.”

The society added: “The costs involved in buying a house and moving can be a significant barrier to securing a home.

“Stamp duty is an additional burden for those wanting to buy their own home.

“It penalises potential buyers who are struggling to save for their deposit, requiring those with the least to save even more.”

It said moving the burden for the tax onto the seller “would mean that the responsibility for paying stamp duty is transferred so the party that is most able to afford it will pay the tax, because they have just sold a property and so have the money.

“This change will mean that all first time buyers will be exempt from paying stamp duty and for those further up the ladder, moving to a bigger house, the cost of doing so will be reduced.”

A Treasury spokesman said: “We want to restore the dream of home ownership for a new generation.

“Over the next five years, our stamp duty cut will help over a million first time buyers getting onto the housing ladder, with an estimated 16,000 first time buyer purchases alone since the changes took effect in November.”