TaxPayers back Badenoch’s plan to scrap Stamp Duty
Stamp Duty is the ‘worst tax’ because it blocks mobility, suppresses transactions and punishes aspiration, according to the TaxPayers’ Alliance’s Joanna Marchong.
Stamp Duty Land Tax has once again come under attack, with a new paper from the TaxPayers’ Alliance claiming it is “the worst tax” and urging ministers to abolish it on primary homes.
Writing for Conservative Home following Kemi Badenoch’s pledge to scrap Stamp Duty on primary residences, Joanna Marchong (pictured), the alliance’s Investigations Campaign Manager, argues the tax “punishes aspiration” and has left the market “rigid and inefficient”, deterring both downsizers and first-time movers.
She points out that when it was first introduced in 1694 to fund a war against France, Stamp Duty was meant to be temporary. More than three centuries later, however, it remains one of the Treasury’s biggest sources of property revenue.
349,000 new homes
Citing analysis by the Adam Smith Institute, Marchong claims that removing the tax on primary homes could unlock 349,000 additional sales a year and trigger construction of 38,000 new homes, which is around 10% of the Government’s annual housebuilding target. In addition, it could also generate an extra £13 billion in construction spending and create thousands of new jobs.
The average buyer now pays almost £10,000 in Stamp Duty, which the Taxpayers’ Alliance says, “fines families for finding a home that suits them better”. It also means older owners delay downsizing, younger families cannot move up, and it reduces the choice for buyers.
Scrapping the levy would make Britain’s economy more dynamic and its society more mobile.”
Although the Alliance expects the Treasury to warn of lost revenue, it argues that the £5 billion cost of abolition would be outweighed by gains for the wider economy, with increased transactions boosting receipts from VAT and income tax.
And Marchong adds that scrapping the levy would “make Britain’s economy more dynamic and its society more mobile”, but warned that further reforms, including to planning and land use, would be needed to fix supply.
With the next Budget approaching, the report adds to growing pressure on the Treasury to consider long-overdue Stamp Duty reforms.
Be careful what you wish for! There’s no way that a government will scrap a tax without replacing it with another tax that generates more income. I just wish that everyone would leave the housing market alone. The more it’s tinkered with the worse it gets. Left alone every free market finds its level that is comfortable for people to buy and sell in. The longest period of stability in the market came between 2009 and 2020 when it was left alone. Apart from the new home HTB scheme which has left a disaster in its wake in the new homes market. These are people’s homes that everyone is tinkering with. Just leave it alone. It’s fine!!