[Politics] Should Stamp Duty be scrapped altogether?

[Mustafa II]

The Telegraph claims that stamp duty is disincentivising older people from selling up and downsizing their homes, locking millions of bedrooms out of the housing market...

Difficult to argue with that. But surely it disincentivises all other people, including myself, from selling up more frequently... contributing to a less dynamic and competitive property market, which can only result in higher property prices over time?

Residential stamp duty raises around £10bn per year in taxes for the UK.

Is stamp duty a fair tax all things considered, or should it be scrapped? ...Or is there a better type of taxation that could take its place?

 

[A1X]

Scrap it, raise inheritance tax (one of the most truly progressive taxes going)

 

[LamieRobertson]

I’d like free stamps

 

[Machiavelli]

Step forward @Dr. No

 

[Machiavelli]

About the only good thing Osborne did was to raise stamp duty, and to introduce several bands at which higher rates kicked in.
If The Telegraph are moaning about stamp duty and wanting it scrapped, it's probably a good idea to keep it.
Another thing to keep in mind is that public services are on its knees, its workers are pretty much all on strike seeking to counter further cuts to their wages.
In short, and The Telegraph won't twig even if they are blue in the face, we need to raise more from taxes, not less.

 

[Machiavelli]

Step forward (and Merry Xmas) @Dr. No

 

[Cheshire Cat]

Given the overall cost of buying a house, its a bit peripheral.

 

[beorhthelm]

Given the overall cost of buying a house, its a bit peripheral.

it probably is in the main, however if there is evidence it discourages downsizing, it definatly needs looking at.

 

[DudsFarm]

Replace it with an annual property tax based on value of property, double rate for second homes.

 

[Live by the sea]

Inheritance Tax is unfair as it penalises hard working parents that wish to leave property to their children . The have every right to do so , why should children get penalised for having hard working and business savvy parents , they shouldn’t .

 

[OzMike]

Stamp duty here is very high compared.
If you get a property for say $300,000 then you will be paying at least $15,000 stamp duty, crazy money.

 

[GT49er]

It's been around for yonks. New ways to raise tax are very difficut to work out and implement (remeber the furore over the poll tax, for example) - this one works, everyone knows about it......... and it's very difficult to avoid, even if you are a not for profit charitable trust based in some otherwise forgotten island in the middle of nowhere.

"If it ain't broken don't mend it" - this one, annoying though it may be when you have to cough up and pay it, ain't broken.

 

[drew]

Remove one tax then you have to raise the money elsewhere. IHT only affects a small proportion (23k in 2019/20 out of about 500k deaths) so that could be changed but wouldn't be popular. There's already a section of society that moan about it despite the fact they are unlikely ever to pay it.

 

[HantsSeagull]

Given the average cost of property (especially down south) the amount of stamp duty payable seems high for the average home buyer. However - their are other taxes that grind my gears more. Capital Gains tax on investments (as opposed to second properties) seems very unfair. Earn money, pay tax on it, take a risk investing it and then get taxed on it again.

 

[drew]

Given the average cost of property (especially down south) the amount of stamp duty payable seems high for the average home buyer. However - their are other taxes that grind my gears more. Capital Gains tax on investments (as opposed to second properties) seems very unfair. Earn money, pay tax on it, take a risk investing it and then get taxed on it again.

But surely you're only getting taxed on the additional earnings, not getting taxed again on what you have already earnt.

 

[GT49er]

Replace it with an annual property tax based on value of property, double rate for second homes.

Never mind replacing it - bring in a progressive property tax anyway - payable because the property exists, here, in England (or other parts of the UK. No metter who the owner is - trust fund based in the Caymen Islands, anyone else who normally evades/avoids tax, this tax is on the property - and the property doesn't have any exemptions.

Pay up, or the property becomes the property of the UK government with no compensation, and can be used, either directly or through revenue earned by selling it, to help solve the housing problems in this country.

 

[HantsSeagull]

But surely you're only getting taxed on the additional earnings, not getting taxed again on what you have already earnt.

Yes indeed. But if i take my taxed earnings and take the initiative and risk to invest that in shares (or whatever) then i don't agree with those gains being taxed. Certainly not at the level they are.

 

[mr sheen]

Inheritance Tax is unfair as it penalises hard working parents that wish to leave property to their children . The have every right to do so , why should children get penalised for having hard working and business savvy parents , they shouldn’t .

No more unfair than punishing kids who don't have such parents

 

[Seagull27]

Inheritance Tax is unfair as it penalises hard working parents that wish to leave property to their children . The have every right to do so , why should children get penalised for having hard working and business savvy parents , they shouldn’t .

No more unfair than punishing kids who don't have such parents

Exactly - children who have hard working/business savvy (or just rich) parents are already advantaged by being brought up in a life of relative comfort. Why should they get a further reward of inheritance, purely because they were lucky enough to be born into that family?

There are plenty of hardworking, loving parents who are unable to give much to their kids on inheritance. An IHT redresses that balance somewhat.

 

[Seagull27]

Given the overall cost of buying a house, its a bit peripheral.

It depends on how big your mortgage is - it's only peripheral if you are able to afford both a mortgage deposit and the stamp duty, as you can't put the stamp duty on your mortgage.

If you're upsizing, the stamp duty will be a pretty significant chunk on top of your deposit. An extra £15,000 makes a huge difference on the deposit on a 10% mortgage - and therefore would probably be the deciding factor for many households on whether they should upsize or just stay in their current house.