A committee of MPs has called on the government to reform stamp duty, arguing the current system is a major barrier to homeownership and harms the property market. The Housing, Communities and Local Government Committee recommended launching a consultation by the end of 2026 to explore alternatives, citing decades of rising house prices and slow wage growth that have eroded affordability in England and Northern Ireland.
The report criticises stamp duty for reducing affordability, slowing the market, and damaging the economy. This comes as the nil-rate threshold for first-time buyers is set to drop from £425,000 to £300,000 in April 2025, while the zero-rate threshold for home movers halves from £250,000 to £125,000. These changes have already spurred a rush of buyers, particularly in London and the south east, where high prices mean stamp duty costs are especially steep.
While acknowledging stamp duty as a valuable revenue source, the committee insisted it must be reformed. Potential options include a full replacement, rate reductions, banding threshold overhauls tied to local prices, and updates to reliefs. The MPs also called for coupling stamp duty reform with an overhaul of council tax and empowering councils to reclaim long-term empty properties more easily.
The report highlighted the role of the 'bank of mum and dad' in helping first-time buyers, stressing that more should be done to ensure fair access regardless of family background. Florence Eshalomi, committee chair, said homeownership rates have declined over 20 years, and for many without family support, owning a home is a 'pipe dream'. She urged a range of supply and demand-side measures, including progress on delivering 1.5 million new homes this Parliament.
The committee pressed for annual homebuilding targets and welcomed plans for a new homeownership product to replace the Lifetime ISA, but warned against a static property price cap that could render it unusable in some areas. Eshalomi concluded that stamp duty reform is necessary but cannot be done in isolation without a credible alternative.
