Proposals to overhaul stamp duty have triggered widespread concern among homeowners, who warn that the changes would create financial strain, discourage mobility and undermine confidence in the housing market.
New research by Boon Brokers shows strong opposition to both of the government’s suggested reforms to Stamp Duty Land Tax (SDLT): shifting liability from buyers to sellers of homes valued above £500,000, or abolishing the tax in favour of a 0.5% annual levy on properties above that threshold.
The survey of homeowners found that 96% believe an annual property tax would inevitably rise over time, while three quarters said it would hit retired and working homeowners hardest.
Among respondents aged 65 and over, 66% said the levy would cause financial strain, with 71% warning it would fall most heavily on retired households.
LESS LIKELY TO SELL
More than half of those surveyed (51%) said they would be less likely to buy a higher-priced property if an annual levy were introduced, while 35% said they would be less likely to sell if required to pay SDLT as vendors.
Only 24% said the proposals would not affect their behaviour, suggesting what researchers described as a potential “mobility freeze” in the housing market.
Concerns over double taxation were also raised, particularly among recent buyers who have already paid SDLT. One in five respondents said they could not afford the annual levy at all, while 57 per cent voiced serious concerns that the 0.5% rate would increase significantly in future.
HOUSEHOLD TRAP
Gerard Boon, managing director of Boon Brokers, says: “Introducing an annual property tax risks undermining the natural fluidity of the housing market.
“Rather than encouraging people to move for work, family, or space, it could trap households in properties that no longer meet their needs, which seems counterintuitive to the broader goals of a healthy housing market.”
Boon Brokers says the findings suggest that the reforms would not only create financial challenges for households – particularly retirees, who are often asset-rich but cash-poor – but could also depress overall activity in the housing market.
With property transactions already subdued amid high interest rates and affordability constraints, the research indicates that changes to stamp duty, if mishandled, risk adding further uncertainty to an already fragile market.
