The Council of Mortgage Lenders (CML) is calling for changes to Stamp Duty Land Tax (SDLT), following criticisms that the controversial tax is the ‘biggest barrier’ to home ownership and moving house.
A new report from the CML suggests that SDLT’s very nature as a ‘transaction tax’ – reliant on property purchases and house moves in order to generate revenue – is ineffective and counter-productive for the property market, in that it deters people who do not wish to be hit with hefty taxes from moving house.
The CML also suggests that the upfront cost of SDLT, which rises in relation to the price of a property, can often be too high for first-time buyers struggling against a backdrop of rising house prices.
It adds that, with SDLT effectively obstructing market activity, Stamp Duty receipts are falling.
Their report reads: “Successive Budgets and Autumn Statements have revised down forecasts for Stamp Duty receipts because property transactions have been subdued.
“More recently, the downward revisions have been due not only to lower overall activity, but also to a Stamp Duty reform introduced in December 2014.
“This increased the tax bill for more expensive properties and has materially slowed down activity at the top end of the market, leading to a fall in the average value of transactions”.
Late last year, a separate study carried out by Later Life Ambitions ahead of the 2016 Autumn Statement found that three in ten Britons felt that SDLT was the ‘biggest barrier’ to moving house.
The study also suggested that SDLT was deterring older homeowners from downsizing later in life.
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