Pressure is building on the Conservative party to honour its previous commitment to reform stamp duty for British buyers and sellers should it win next month’s General Election.
Some months ago Boris Johnson said during his Tory leadership campaign that he would consider raising the stamp duty threshold from £125,000 to £500,000 and cutting the top SDLT rate from 12 to seven per cent. But now the Financial Times has hinted that promise may now be on the back burner.
The FT reports: “The prime minister had previously promised big income tax cuts for those earning more than £50,000, and cuts to stamp duty, while Chancellor Sajid Javid had said he was interested in cutting inheritance tax. But Mr Johnson, speaking on a campaign visit in the north-east, declared: ‘The priority must be to help those who need help with the cost of living.’”
Today the Conservatives have suggested they will increase stamp duty for overseas buyers via a three per cent surcharge, but there has been no mention of the long-expected reform for the domestic market.
So far the other parties have made their positions clear.
Labour says it will make no change to existing stamp duty thresholds, but there will be a second homes tax to apply to all additional homes, not just holiday properties: this will be the equivalent of double the rate of council tax and will bring in an estimated £560m a year.
The Liberal Democrats want to link stamp duty to the energy rating of a property and to introduce a stamp duty surcharge on overseas residents purchasing second homes.
North of the border the Scottish National Party says it has no plans to change the structure of that country’s stamp duty equivalent, the Land and Buildings Transaction Tax.
But after spending the summer speculating about how it would reform stamp duty, the Conservative party has so far been quiet on the subject during the election campaign. This is despite the Conservatives yesterday revealing substantial details of their house building objectives, and proposed reforms of the private rental sector.
There’s now a growing number of bodies using the election to lobby for reform.
Yesterday the Royal Institution of Chartered Surveyors made it clear it wanted a root-and-branch review of the duty, saying: “The review should decide if the government wants to achieve revenue generation, market fluidity or another objective from SDLT; investigate whether the tax is fit for purpose; consider potential alternative taxation measures, such as a stamp duty exemption for downsizers or replacing stamp duty altogether with a reformed council tax; and consider a transitionary phase from the current system to a new regime.”
The Intermediate Mortgage Lenders Association this week said stamp duty remained a “significant deterrent” to home movers and said a review of the tax was “overdue”. It also claimed the existing relief of this tax to first-time buyers potentially increased the prices of properties they were thinking of buying “as it became clear that they would have more cash to play with”.
And the Association of Accounting Technicians has repeated its desire to see stamp duty liability from the buyer to the seller as it would remove all first-time buyers from the duty at no cost to the taxpayer.
A week ago Purplebricks and property industry consultancy Glenigan says a substantial increase in the threshold before stamp duty became payable could trigger an additional 131,000 house completions per year alongside an average saving of £4,300 for movers.
The Conservative manifesto is to be released on Sunday.