Sellers should pay stamp duty, says mortgage lender.
A mortgage lender has called on the government to reform stamp duty so that it is paid by property sellers instead of buyers.
Yorkshire Building Society claims this initiative would remove the tax burden entirely for more than 225,000 first-time buyers each year.
The lender uses figures from the Council of Mortgage Lenders to show that between June 2015 and June 2016, 75% of all first-time buyers paid stamp duty on their purchase.
According to Yorkshire Building Society’s figures, if first-timers were exempt from paying stamp duty it would save them an average of £3,791, or £13,171 in London.
It claims that those moving up the property ladder would save an average of £4,093 (£9,762 in London).
The firm has made the lobbying call ahead of November’s Autumn Statement and says that it will outline the case for stamp duty reform in an official submission to the government.
What Is Stamp Duty?
Based on the government’s estimate that the first-time buyer stamp duty holiday introduced in 2009 was responsible for a 2% increase in transactions, Yorkshire Building Society predicts that passing stamp duty costs on to sellers would see transactions increase by 16,000, raising an additional £156 million.
“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,” comments Andrew McPhillips, Yorkshire Building Society’s chief economist. 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” he adds.
Last week, the Welsh Government announced that from April 2018, stamp duty will be replaced with a Land Transaction Tax.
Neil Newstead FARLA, MNAEA
CEO – Oakfield Estate Agents