The House of Lords committee on intergenerational fairness has called for the Government to reform stamp duty, saying that it has “seriously distorted the housing market”. John Phillips, group operations director at Just Mortgages and Spicerhaart agrees, he said: “Stamp duty tax makes up such a huge proportion of the cost of moving that many of those who want to upsize are choosing to extend instead, creating a plethora of houses all the same size and nothing in between. While at the other end of the scale, older people are staying put rather than paying to downsize and are being criticised for ‘taking up’ all the family homes.
“There is an argument that of course stamp duty brings in valuable income for public spending – about £8billion a year – which sounds like a lot. But what about the costs associated with people not moving because of stamp duty costs? For example, older people living in homes unsuitable for their needs which adds extra pressure to health and social services.
“I supported the cut in stamp duty for first time buyers as it was a start, but said at the time, if you only help first time buyers, property prices will be forced up as sellers try and add the money ‘saved’ onto asking prices, to help them cover their own stamp duty costs! And this is what we have seen, to some extent.
“In my opinion, stamp duty has a lot to answer for, so I welcome this report’s findings. Stamp duty is stifling the market and is long overdue a huge overhaul – ideally, it would be abolished altogether, but significant cuts would be a good start.”