Rightmove demands stamp duty overhaul
Rightmove has called on the government to overhaul stamp duty thresholds to help first-time buyers get on the property market.
The UK’s largest property platform urged ministers to increase the thresholds at which the tax kicks in, to reflect house price rises that have occurred in recent years and “help mobility across many parts of the property market”.
In an announcement released alongside its half-year results, the portal blamed April’s return to higher stamp duty rates on the stubbornly low number of property transactions, saying it was adding harmful friction to the market and hampering growth.
It cited data showing that as recently as 2017, over half of properties in England were free from any stamp duty for first-time buyers. That share now stands at just 40 per cent, which the firm said “highlighted the need for a review”.
Johan Svanstrom, chief executive of Rightmove, said: “Stamp duty can be a big barrier to movement, and so we want to see ways that affordability can be improved and more first-time buyers can be supported onto the housing ladder.”
Stamp duty a ‘terrible tax’
The Treasury is expected to rake in record receipts from stamp duty this year, thanks to a decision from the Chancellor at her maiden Budget last year not to extend a ‘holiday’ on the thresholds that was due to expire in April.
In a bid to stop the property market from screeching to a halt during the pandemic, then-Chancellor Rishi Sunak doubled stamp duty thresholds for regular homeowners from £125,000 to £250,000. He also ramped up the level at which the tax kicked in for first-time buyers from £300,000 to £425,000.
Liz Truss re-implemented that holiday until at least 2025 during her fateful 2022 mini-Budget, but Chancellor Rachel Reeves chose not to extend it again last autumn to shore up the Exchequer’s parlous coffers.
Leading think tank bosses, including the Institute for Fiscal Studies’ Paul Johnson and Tax Policy Associates’ Dan Neidle, have held stamp duty up as one of the most harmful taxes to Britain’s economic growth prospects.
In an excoriating research note published last year, Neidle branded it a “terrible tax” that suffocated liquidity in the property market. Chief among his criticisms were that it discouraged older homeowners from downsizing to smaller homes, and hurt first-time buyers’ hopes of getting on the property ladder.
Svanstrom added: “We’d encourage the government to review the current stamp duty thresholds, and see if there is a way to update these to better reflect current house prices, to help increase mobility across the market.”
A spokesman for the Treasury said: “We are taking decisive action to deliver 1.5 million homes as part of our plan for change, including a £2bn boost to the Affordable Homes Programme, introducing a permanent and comprehensive mortgage guarantee, and our planning reforms will deliver an additional 170,000 homes by 2029/30.
“Thanks to measures taken at the Budget, there will also be an additional 130,000 transactions over the next five years by first-time buyers and others buying a primary residence.”