There has been much speculation concerning stamp duty from Chancellor Sajid Javid in recent days.
The Chancellor has now clarified that currently there are no plans to transfer the payment of stamp duty tax from house buyers to sellers and that he would not support such a move, according to a tweet Mr Javid wrote on 18th August.
This comes after an article written in the Times on 17th August claiming that the Chancellor was considering the move in order to save first-time home buyers from paying this tax. He also stated that there must be bold measures for housing in Britain, according to the Ministry of Housing, Communities and Local Housing. However, he does not believe that shifting the tax to sellers is the solution.
Mr Javid refused to confirm his plans for reform to the tax system but merely explained that he wishes to see a simpler tax system.
The latest statistics have also shown that house sales and prices have lost momentum following the uncertainty surrounding Brexit, with key aspects in the housing market flat-lining, according to the RICS (Royal Institution of Chartered Surveyors).
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Stamp duty is a tax on purchases for properties worth over £125,000 in Northern Ireland and England. For first-time buyers, it was abolished in 2017 for property worth under £300,000.
In Wales this is known as the Land Transaction Tax, and in Scotland the Land and Buildings Transaction Tax. It ranges between 2 and 12 per cent depending on a property’s value.
Why Stamp Duty Should Be Paid by Sellers
The AAT (Association of Accounting Technicians) is one organisation which has been proposing this switch for years.
They state that by switching liability it would create a cheaper, more effective, simpler and fairer system than the current stamp duty scheme. It is claimed that making the move would mean that first-time buyers would find it easier to make their first move onto the property ladder, while helping those already there to move up.
Forcing sellers to pay stamp duty tax instead of buyers would make buying properties cheaper for those searching for their first homes or those looking to find larger homes. However, it could make homeowners reluctant to downsize.