Tax – will Jeremy Hunt target stamp duty in his Budget?

Writing in the Landlord Today, Adrian Lowery, financial analyst at leading wealth management firm Evelyn Partners questions what the Chancellor might do in the budget on March 6th with stamp duty.

It can be seen here, stating that the Stamp Duty Land Tax (SDLT) has been a significant revenue-raiser for the government, with receipts steadily increasing over the years. However, its effectiveness and impact on the housing market have sparked debates and criticisms, prompting calls for reform.

Here’s a breakdown of the key points outlined in your article:

  1. Revenue Growth: SDLT receipts have seen a substantial increase over the years, with estimates for the 2022/23 tax year reaching £15.40 billion, marking a four-fold nominal increase since 2000/01.
  2. Criticism and Calls for Reform: Despite its revenue-raising potential, SDLT has been criticized as an intrusive and arbitrary tax, viewed negatively by potential and actual homebuyers. Critics argue that it congests the property market and hampers labor mobility, potentially damaging the UK economy. Paul Johnson of the Institute for Fiscal Studies (IFS) has called for reform, suggesting that abolishing or reducing SDLT could revitalize the housing market and stimulate economic growth.
  3. Potential Policy Changes: There is speculation that the Chancellor might consider extending stamp duty reliefs, such as increasing thresholds or implementing temporary SDLT holidays, to boost the housing market and overall economic growth. Such measures could be particularly appealing if there are constraints on fiscal spending for larger giveaways like income tax cuts.
  4. Impact on Downsizing and Housing Market Dynamics: Large SDLT bills are seen as a disincentive for older homeowners to downsize, contributing to a shortage of family homes on the market. This, in turn, makes it more difficult and expensive for younger buyers to move into larger properties in desirable areas, potentially impeding overall economic productivity.

Overall, SDLT has become a significant policy issue, with its potential impact on housing market dynamics and economic productivity shaping the narrative ahead of the General Election. Calls for reform and potential policy changes underscore the importance of addressing the challenges posed by SDLT in a manner that balances revenue considerations with broader economic and social objectives.

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