Calls for an overhaul of the stamp duty system have been mounting today as Boris Johnson is confirmed as UK Prime Minister.
Johnson is believed to be considering scrapping stamp duty on homes up to £500,000 and halving the tax charged on homes over this threshold in a bid to stimulate the market.
The new Prime Minister is also thought to be planning to cut the rate for properties over £1.5m from 12 per cent to 7 per cent.
Industry experts have today intensified calls for the new Prime Minister to push ahead with his plans to revamp the tax as HM Revenue & Customs data shows residential property sales slumped 16.5 per cent to 84,444 in June compared to the same month last year.
Reallymoving chief executive Rob Houghton says: “Scrapping stamp duty for downsizers is the simplest and most cost-effective way of freeing up the housing market, allowing older people to move into more suitable homes if they so wish and reducing competition among families for larger homes.
“Since downsizers account for just 7 per cent of stamp duty contributions, this proposal wouldn’t be disastrous for the Treasury.
“When a larger house gets sold it enables a chain of transactions and I believe the lost stamp duty revenue would be more than recovered by boosted transaction levels across the market, not to mention the release of vast equity by over-65s which has been locked into property for decades with no benefit to the wider economy.”
Private Finance director Shaun Church agrees.
He says: “Activity in the housing market is falling and in desperate need of a stimulus.
“Rumours of a stamp duty overhaul have been circulating for some time now and we urge Johnson to make these rumours a reality and re-galvanise the property market, which is after all a crucial asset of the UK economy.
“For too long stamp duty has stagnated the UK housing market. Last-time buyers in particular remain stuck in homes too large for their needs that are too costly to give up.
“We’re calling for a last-time buyer exemption to be included as part of Johnson’s stamp duty overhaul, encouraging empty nesters to downsize to homes more suited for their future needs, freeing up crucial housing stock for the wider property ladder.”
Some have suggested that Johnson should switch stamp duty liabilities from the buyer to the seller, but Jackson-Stops chairman Nick Leeming warns that would “do little to improve the overall market”.
Others urged Johnson to steer clear of any further onerous rules for buy-to-let.
Residential Landlords Association policy manager John Stewart says: “As Mayor of London Boris Johnson spoke of not over-regulating the rental market, and for the need to boost the supply of homes to rent.
“As Prime Minister, it is vital that his Government makes good on this sentiment, ensuring policy boosts the supply of homes to rent and supports the vast majority of landlords doing a good job whilst focussing resources on finding and rooting out the crooks.”
PayProp chief operating officer Neil Cobbold called on Johnson to consider reversing the tax clampdown on landlords, but admitted it was “doubtful” the new Prime Minister would do so.
“The buy-to-let market has stalled due to tax changes like the stamp duty surcharge and cuts to mortgage tax relief under Section 24.
“If Boris Johnson is able to remove all stamp duty and land tax surcharges for buy-to-let landlords, he could reinvigorate the sector – especially in areas with high-value homes where we’re not seeing a lot of movement at the moment.
“Although this could help the market, a pledge to cut stamp duty alone won’t be enough to counteract losses from Section 24 and bring the leveraged buyer back into the market.”