Britain's property experts are urging Chancellor Rachel Reeves to abolish the 'sin tax' of stamp duty in the upcoming budget, as a new annual property tax may take its place.
The proposed change has sparked concerns among buyers, with many already facing uncertainty about potential changes to the tax on property purchases above £125,000. In fact, Kirstie Allsopp, presenter of popular Channel 4 property shows Location, Location, Location, warned that people are feeling "in a panic" and "just sitting tight", fearing for their financial futures ahead of the November 26 budget.
Experts claim that stamp duty is an economic distortion, pushing potential buyers out of home ownership, particularly first-time buyers. They point to staggering figures - for example, 40% of Zoopla's first-time buyers would pay £16,000 in average stamp duty bills, about 3% of the property value. "It traps people out," says Richard Donnell, research director at the website.
Other experts echo this sentiment, including Kate Willis, technical officer at the Chartered Institute of Taxation, who believes that stamp duty is relatively easy to collect but causes significant economic distortion.
However, not all experts are convinced that abolishing stamp duty altogether would be a good idea. Tim Leunig, director of economics at Public First Consulting, warns that if it's just abolished without alternative measures in place, house prices may skyrocket - particularly in London.
In contrast, Leunig proposes an annual property tax payable by buyers of homes worth above £500,000, with a 0.54% yearly levy on home value and higher rates for properties worth more than £1m.
The proposed change has sparked concerns among buyers, with many already facing uncertainty about potential changes to the tax on property purchases above £125,000. In fact, Kirstie Allsopp, presenter of popular Channel 4 property shows Location, Location, Location, warned that people are feeling "in a panic" and "just sitting tight", fearing for their financial futures ahead of the November 26 budget.
Experts claim that stamp duty is an economic distortion, pushing potential buyers out of home ownership, particularly first-time buyers. They point to staggering figures - for example, 40% of Zoopla's first-time buyers would pay £16,000 in average stamp duty bills, about 3% of the property value. "It traps people out," says Richard Donnell, research director at the website.
Other experts echo this sentiment, including Kate Willis, technical officer at the Chartered Institute of Taxation, who believes that stamp duty is relatively easy to collect but causes significant economic distortion.
However, not all experts are convinced that abolishing stamp duty altogether would be a good idea. Tim Leunig, director of economics at Public First Consulting, warns that if it's just abolished without alternative measures in place, house prices may skyrocket - particularly in London.
In contrast, Leunig proposes an annual property tax payable by buyers of homes worth above £500,000, with a 0.54% yearly levy on home value and higher rates for properties worth more than £1m.
. I mean, it's like they're trying to make buying a house harder, but then what? They wanna tax us even more if we abolish it 
. I get that it might be hurting some people, especially first-time buyers who are already struggling with prices, but is it really worth making it harder for them to own their own home? 
. An annual property tax that's just added on top of everything else? That sounds like a recipe for disaster 
. I mean, who's gonna be able to afford it? Not me, that's for sure 
. Can't they just find something more fair and reasonable instead of just switching one problem for another? 
?! I mean, it's no wonder people are feeling "in a panic" 
, thinking about how this tax affects their ability to buy a home. It's like, £16,000 for 3% of the property value? That's just too much 
. Can't we find a balance here? Maybe something in between? 
I'd love to see what other solutions come up during the budget discussions 
!
like it's trappin ppl out of their dream homes & makin them think twice about buyin 4eva 
rich folk are all over this tho, sayin it'll just cause prices 2 go skyhigh in london 
what do u think??
... but at least its somethin better than stamp duty, rite? 
It's gotta be something else entirely to replace it, like that annual property tax Tim Leunig suggested... 0.54% yearly levy on home value? That doesn't sound too bad 
. Fingers crossed for all you first-time buyers out there 
!
, not just the super-rich 
what do u think? should they just get rid of it or come up with something better? 
. It just seems like they're trying to squeeze more money out of people when they're already struggling to buy a home 
. I guess some experts think it's easier to collect than other things, but still... 
we didn't have all these fancy taxes to worry about! Remember when you could just buy a house with a bit of savings and a decent credit score? Nowadays, it's like they're charging you an arm and a leg just for buying a home. I mean, 3% of the property value is just too much for some people 
We can't afford another housing crisis like we had back in 2008 
. The problem is that it has to be done right, you know? We can't just throw money at the problem without making sure it's gonna work 