Shock advice to buyers: Consider waiting in case Labour scraps SDLT

Until now General Election pledges of stamp duty reforms were restricted to the Conservatives - but now a tax consultancy says it could be Labour that effectively scraps SDLT.

And in a move that will dismay estate agents and sellers, the consultancy says that prospective buyers may want to sit tight and not commit in case the transaction costs plummet should Labour form the next government after December 12.

Mishcon de Reya’s tax and wealth planning team says it is operating on the basis of past statements, as so far no party has published its formal manifesto for this winter’s poll.

But it suggests that Labour has, in a relatively low profile announcement earlier this autumn, indicated that it could abolish SDLT for those buying homes to live in themselves. 

However, SDLT would remain in place for non-doms, companies, second homes and investment properties - and may well rise significantly for some or all of those categories.

Mishcon de Reya does not mention Labour’s announcement specifically, but it must relate to the proposals set out in an independent review of property tax and land usage, commissioned by Labour and delivered at the end of the summer. 

The report, entitled Land for Money, sets out a number of radical proposals with a radical overhaul of tax at the centre of the initiatives. 

In the report its authors, including George Monbiot, say SDLT would be abolition of the tax for purchasers buying residential property as their primary residence, with the burden of future SDLT moving still further to second home owners and buy to let landlords with property portfolios.

Mishcon do Reya continues that it is of course possible that this policy would not be enacted.

However, when it comes to planning for the near future it advises: “For those buying a residential property to live in themselves, consider waiting until after the Election. For other buyers, consider completing pre-Election.”