Reform of stamp duty is always high on the agenda of property professionals, from estate agents to conveyancing solicitors. The HomeOwners Alliance has been leading the charge for what it calls a “fundamental rethink” of the charge that is levied on a sliding scale on property sales above £125,000.
Amid the calls for the Chancellor of the Exchequer to look again at stamp duty in November’s Budget, the Association of Accounting Technicians (AAT) is making a radical proposal – switch the burden of paying the property tax from buyer to seller.
As part of its three key asks for the Chancellor, the AAT said it does not support scrapping stamp duty, as it raises more than £11 billion every year for the exchequer. However, it described the charge as a “significant burden to both homeowners seeking to move and to first-time buyers trying to get on the housing ladder”.
Regime ‘stunts mobility’
Its submission goes on: “The current Stamp Duty regime stunts mobility, impacting on employment and productivity. It is also likely reducing the supply of new homes – adding to Britain’s housing affordability crisis.
“AAT believes that switching liability for Stamp Duty will help more people get on the property ladder, help those moving up the property ladder, increase the amount of house purchases whilst maintaining the substantial multi-billion-pound revenue for the exchequer.
“Switching liability to the seller will have a positive impact on the ability to pay because it will mean that people moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-price one they are buying.”
Long-term benefits for the market
Phil Hall, head of public affairs and public policy at the AAT, said the proposal would provide long-term benefits to both buyers and sellers in the property market.
He added: “In most cases, admittedly not all, downsizers will probably have no mortgage and will have significant equity. They’re likely best placed among all home owner types to pay a little extra, certainly better placed than first-time buyers.
“It could also be argued that once this has been in place for a few years, downsizers are likely to have benefited from the seller pays regime to have got to where they are on the ladder.”
The Chancellor will announce his second Budget of 2017 on November 22, the first autumn budget in the UK since 1996.