Property experts, including television presenter Kirstie Allsopp, have urged Chancellor Rachel Reeves to abolish stamp duty in the upcoming budget, describing it as a 'sin tax' that punishes homebuyers. The experts proposed replacing the levy with an annual property tax, as the Treasury considers a major overhaul of the system.
Allsopp, known for Channel 4's Location, Location, Location, told MPs on the Treasury committee that 'people are in a panic' about potential changes and are 'sitting tight' ahead of the 26 November budget. She argued that stamp duty penalises those moving to more expensive homes, stating, 'You are actually punished for wanting to buy a more expensive property than the previous one.'
The Treasury is reportedly considering a new tax on home sales above £500,000 as part of a broader reform of stamp duty and council tax. Meanwhile, Taylor Wimpey reported a drop in autumn sales, blaming budget uncertainty for deterring potential buyers.
Other experts echoed calls for abolition. Kate Willis of the Chartered Institute of Taxation noted that while stamp duty is easy to collect, economists agree it distorts economic activity. Richard Donnell of Zoopla highlighted that 40% of first-time buyers would pay stamp duty, with average bills of £16,000, 'a quite big hit' that traps people out of home ownership and pressures the rental market.
Tim Leunig of Public First Consulting proposed replacing stamp duty with an annual 0.54% tax on homes worth over £500,000, with higher rates for properties above £1m. He argued that stamp duty restricts mobility and lowers GDP, but warned that outright abolition would inflate house prices, especially in London.
On the idea of a mansion tax, Allsopp predicted many properties would be priced just below the threshold. Leunig questioned why property wealth should be singled out, suggesting a broader wealth tax would be more equitable.
