The head of one of the UK’s largest property technology providers has warned that government plans to overhaul housing taxation risk destabilising the market at a time when transactions are already at historic lows.
Property Soup reported on rumours earlier this week that Chancellor Rachel Reeves was eyeing up several options including tinkering with both stamp duty and Capital Gains Tax.
Riccardo Iannucci-Dawson (main picture), chief executive of Alto – the software platform that underpins more than half of all UK housing transactions – says reform could provide a once-in-a-generation opportunity to fix a system that is “outdated and unfair.”
But he cautions that poorly designed changes could choke off activity and damage confidence across the sector.
BIGGEST SHAKE-UP
He says: “Property tax reform would be the biggest shake-up in a generation. Stamp duty adds tens of thousands to the cost of moving and locks people into homes that no longer fit. Well-designed reform could unlock mobility but get it wrong and it risks stalling the market even further.”
His comments come amid a swirl of speculation ahead of the autumn Budget. Property Soup reported earlier this week that the Treasury is examining options including replacing stamp duty with a levy on sellers of high-value homes, rebasing council tax bands, or imposing capital gains tax on main residences above a certain threshold.
Ministers are understood to be seeking ways to plug a £40 billion hole in the public finances, while sticking to pledges not to raise VAT, income tax or national insurance.
HARD TO PLAN
But Iannucci-Dawson warns that introducing an unpredictable annual charge linked to property values would be “really hard to plan for” for homeowners, while landlords could face “multiple charges across portfolios” – a move he said risked either raising rents or driving investors out of the sector altogether.
And he adds that sudden shifts in tax policy created particular challenges for estate agents who rely on steady pipelines of transactions.
He says: “At Alto, we power more than half of all UK housing transactions each year, so we see first-hand how friction in the system slows movers and the wider economy.”
Industry groups have previously argued that high stamp duty thresholds suppress activity, particularly in London and the South East, where buyers can face bills of more than £50,000 on average properties.
Iannucci-Dawson says reform is needed but has to “strike the right balance between raising revenue and supporting a healthy, mobile housing market. Otherwise, it risks undermining confidence when stability is needed most.”
