05.09.2014

MPs Have Called For An End To Stamp Duty On Homes Under £500,000

A group of MPs have claimed that stamp duty is impacting on too many home movers in today’s housing market and that it should be reformed to ease the pressures on those looking to move.

Property price rises in recent years mean that a quarter of home movers are now subjected to three per cent stamp duty as their new properties are valued at over £250,000.

This is a significant increase on the ten per cent of movers that had to pay stamp duty a decade ago. 

Speaking during a debate in the House of Commons, Conservative MP Dominic Raab, said stamp duty needs to be reformed as had it increased with inflation it would now only apply to home over £1.3 million.

Many MPs have now urged the government to abolish stamp duty on homes valued at under £500,000 as they believe this will make the housing market more fluid and encourage more property sales.

Fellow Conservative MP Anne Main, said stamp duty has become a “middle class postcode tax" that could leave many young people unable to afford to buy a home.

Expert Opinion

The stamp duty land tax was implemented at a time when houses were significantly cheaper and it only affected a small percentage of home movers. However, recent price increases now mean that a large number of people are paying stamp duty. <br/> <br/>“For some this increased cost prevents them from moving on to their next home and climbing the property ladder, while others in larger homes just over the £250,000 threshold are unwilling to put their house on the market, as they know they will have to reduce the price. For many different reasons it is leading to a lack of supply in the market. <br/> <br/>“Any reduction in stamp duty on homes over £250,000 would be welcomed by the property market and those looking to upgrade to a bigger home just over this threshold.” Helen Hutchison - Partner