One of the country’s leading estate agents says shifting the burden of stamp duty away from the buyer - which is said to be under consideration by Boris Johnson - would be a major boost to the housing market after years of stagnation.
Trevor Abrahmsohn, who runs high-end London agency Glentree Estates and is credited as the agent behind OnTheMarket, says he has been proposing a shift of stamp duty away from buyers for some years.
He welcomes the suggestion that Conservative leadership front-runner Johnson may be considering the switch, as claimed this week by the Association of Accounting Technicians, and says it could end a long period of housing market stagnation.
Abrahmsohn himself suggests possibly sharing the burden of stamp duty across both sellers and buyers, which he says would undo that harm done by the last major SDLT reform undertaken by former chancellor George Osborne in late 2014.
“With the existing system, potential purchasers looking at a liability of up to 15 per cent will shrug their shoulders and realise it's not worth the upheaval. If they want a change of scene, they can just refurbish their existing abode. Alternatively, some buyers will transmogrify into uber-tenants, renting instead of buying the property. The upshot is that the Treasury is depleted of SDLT receipts” he adds.
The London agent says Osborne’s plan was “foolish, uncollegiate and arrogant” and was a significant contribution to “a DIY recession across the capital and beyond, dragging prices and transactions down by 35 and 60 per cent respectively” which may have cost the government over £1 billion in reduced income.
Abrahmsohn is no less critical of outgoing Conservative PM Theresa May - he calls her “a tacit leftist” - and he accuses current chancellor Phillip Hammond of lacking the political will to “sort out the costly and self-defeating stamp duty scales.”
But he believes Boris Johnson, should he win the Tory leadership, may make the change.
“Two years ago I suggested that if there was no intention of rectifying SDLT levels, perhaps this penal tax could be shared between buyer and seller, thereby halving the pain. Of course, with all these potential reforms, everything is in the 'mouse' print. As the seller is liable for the tax, this can affect the loan to value ratio, particularly at the margins.
“Banks, building societies and lending institutions will become twitchy if they think that upon disposal a seller has less equity to pay the loans. These institutions will be mindful that HMRC is always lurking in the wings, keen to grab their portion of the spoils” he continues.
He says sharing the SDLT liability between buyer and seller lowers the threshold, which promotes much-needed activity, which would in turn contribute towards boosting the wider economy as homeowners enjoy a greater feeling of affluence.