OPINION: Labour’s decision to roll back Stamp Duty reliefs is odd
Nigel Lewis had time to reflect on the party's decision to make it more expensive to buy a home after March next year during a chat on Russell Quirk's Talk TV show.
On Sunday afternoon I joined industry contrarian Russell Quirk on his Talk TV show to dissect what Labour’s plans for Stamp Duty might mean for both home movers and the wider property sector.
The most perplexing part of all was Keir Starmer and Shadow Chancellor Rachel Reeves’ decision to roll back the Stamp Duty relief offered to first time buyers.
This includes dropping the upper threshold at which Stamp Duty starts off from £425,000 to £300,000 and the upper property value it will apply to from £625,000 to £500,000.
The headlines about this had been on the front of The Sunday Times copies in the foyer of Rupert Murdoch’s London HQ as I waited to join Quirk 17 floors above.
It was an odd story, though, as I tried to make clear during the Quirk chat.
The OBR’s costings for these measures published during Jeremy Hunt’s 2022 Autumn Statement (when they were introduced) said they would initially cost £120m but then make the Government an extra £1.63 billion by 2027/8 as a busier sales market generated more Stamp Duty revenue.
I should mention that these costings include a third measure – which was raising the ‘nil rate’ at which buyers of all kinds paid Stamp Duty from £125,000 to £250,000. All three were due to ‘sunset’ at the end of March next year but the Tories have now promised to keep them if they win the Election.
Peanuts
This begs one question – why has Labour decided not to keep the measures given they will cost peanuts by Government spending standards? The answer came in a poll by Jackson Stops, which last week revealed that only a fifth of voters think the higher thresholds should be kept.
My view is that Labour has calculated that the ‘difficult but not impossible challenges’ most first time buyers face are not voting deal breakers.
The challenge here is that the housing market crisis whether in sales or lettings is so complicated and difficult to solve that most voters don’t have the time to get their heads around it and stick their skulls in the sand instead.
And most politicians including Labour know this and so love to talk in broad sweeps – ‘we’ll build 1.5 million homes in five years’ and Keir has said – even though they know this will be impossible to deliver.
And that’s the great British fudge everyone seems to be happy to jog along with. And my time chatting with Quirk pretty much reflected that.
