Among other factors (policy and economic performance being key), changes to taxation in the form of stamp duty land tax at point of sale can have a big impact on cooling or stimulating the level of activity in the UK housing market.
The new Prime Minister, Boris Johnson, has said he is considering stamp duty reform during his premiership. Measures he has aired publicly to date include:
- Increasing the base threshold to £500,000 from £125,000 (to increase activity at the bottom end of the market, especially once Help to Buy ends)
- Reducing the top rate tax to 7% from 12% for £1.5m+ homes (to increase activity at the top end of the market, which has been very subdued in recent years)
- Sellers paying stamp duty and not buyers. However this is likely to be very unpopular with current owners having to pay tax twice. A more detailed version of this insight is available on our blog, ‘View from the loft’.