The government should resist any further increase in stamp duty not only to help the property market but to help guarantee revenue for public spending in the future.
That's the view of London agency ludlowthompson which says that with £11.7 billion in income from SDLT in the last year, the government has become "increasingly reliant" on stamp duty income. It has risen 70 per cent over five years, and 10 per cent in the past 12 months alone.
But uncertainty surrounding Brexit may impact the take from SDLT tax in the future warns the agency.
“It is important that the government does not become complacent about this source of income and it would be better for the UK economy if we weaned ourselves off this source of income” explains Stephen Ludlow, chairman at ludlowthompson.
“Stamp duty is a tax on worker’s mobility. Higher rates make moving much more costly, but mobility is vital to keeping an economy at its most dynamic and productive. It is key to ensure that the UK has fluid labour mobility. Moving should be a smooth process for workers, and they should not be discouraged from doing so due to the transactional costs of buying a new property” adds Ludlow.
He says policies such as the three per cent stamp duty surcharge for buy to let properly have, for example, negatively impacted the supply of available rental property, which has the ultimate knock-on effect of hampering labour mobility.
“With Brexit underway it is more important now than ever to ensure that our economy is as strong as possible, with both a healthy and active property market as well as flexible labour mobility. A further increase in the tax burden on residential property following the election could be very problematic for the smooth functioning of the UK economy” he warns.