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According to research from the Nottingham Building Society earlier this year, 1 in 10 homeowners has decided against moving house due to stamp duty or mortgage issues.
Stamp duty alone affected the decisions of 12%, with 18-44-year olds most likely to be put off.
When George Osborne changed the stamp duty rules in 2016, it was aimed at making it fairer and was predicted that 98% of people would pay less. Before you would have paid a flat percentage fee on the total value of a property that you were purchasing. Now it is a tiered system.
First-time buyers and people buying at the lower end of the price range now pay less. It’s perhaps worth working out exactly what the stamp duty will be on the property that you can afford to buy, as it may not be as much as you think.
On the other hand, people buying a second property or a buy-to-let property are paying an extra 3% over and above the standard rates. Figures indicate that this has seen an unexpected rise in revenue for the treasury, suggesting that it hasn’t had the desired effect of deterring landlords from buying property.
It’s a contentious tax and there are various calls for stamp duty to be changed.
The Association of Accounting Technicians (AAT) has asked for sellers rather than buyers to be responsible for stamp duty. This would take the pressure off first-time buyers who face the task of funding a deposit as well as other associated costs.
Baroness Ros Altmann, a former pensions minister, is suggesting that stamp duty should be reduced for down sizers to encourage them to move to free up properties. Research from retirement housebuilders McCarthy and Stone indicates that 1.2 million adults over the age of 65 would be encouraged to move if a stamp duty exemption were to be introduced.
Recently, Conservative MP Jacob Rees Mogg said that stamp duty should be cut to help them win the next election.
Whatever is decided, stamp duty represents a large sum of money for the Government and it’s not going to go away. It may change, but it’s impossible to predict in which direction it will go. If it moves to the seller taking responsibility for paying it, then owners of high value properties wanting to downsize will pay a higher price.