Jeremy Hunt ‘could still target Stamp Duty in Spring Budget’

Jeremy Hunt’s admission to ITV political editor Robert Peston this week that he won’t ‘have the kind of room that I had for those very big tax cuts in the autumn’ could actually open the door for changes to Stamp Duty.

Hunt’s backtrack came after the Office for Budget Responsibility said the Chancellor would have headroom of £14 billion – less than half the £35 billion headroom they said he had in Autumn.

Stamp Duty

But prior to Hunt’s admission, Adrian Lowery, a Financial Analyst at Evelyn Partners, speculated that if Jeremy Hunt didn’t get the fiscal headroom he needed for a big giveaway on something like Income Tax then it would be more likely he will look at inexpensive cuts to more targeted levies like SDLT or Inheritance Tax.

He says: “A slow property market tends to depress consumer confidence and the wider economy, so Mr Hunt could present an SDLT cut as a tactic in pursuing his growth strategy.

“It seems beyond dispute that large SDLT bills are a disincentive towards downsizing for older homeowners.

“But as they calculate the many substantial costs of moving, including Stamp Duty on a purchase, they are deterred from acting.

“Many retirees instead resort to equity release and lifetime mortgages but such loans can become unexpectedly expensive and burdensome, and in some cases leave a nasty surprise for the beneficiaries of an estate.

BLOCKAGE

He adds: “This blockage in turn contributes to a dearth of family homes on the market and makes it less possible and more expensive for younger buyers looking at in-demand areas to move into larger properties.

“The notion that Stamp Duty acts as a drag on moving at this and other rungs on the property ladder – and therefore on overall economic productivity – could yet propel it into the general election narrative as a policy issue.”

On Wednesday fresh data on Stamp Duty Land Tax (SDLT) from HM Revenue & Customs yesterday revealed that total SDLT receipts in Q4 2023 were marginally lower than in the previous quarter and 21% lower than Q4 2022 – likely due to the number of transactions falling 20% on Q4 2022.