A cross-party group of MPs has urged Labour Party Chancellor Rachel Reeves to scrap stamp duty, warning that the tax is harming the economy. The Housing, Communities and Local Government (HCLG) committee has recommended that the Chancellor consider abolishing the tax entirely, stating that it “slowed the property market and ultimately damages the economy.”
Stamp Duty Threshold Changes
In April last year, Chancellor Reeves lowered the threshold at which stamp duty is paid from £250,000 to £125,000, and from £425,000 to £300,000 for first-time buyers. However, the HCLG committee now argues that the tax should not be maintained in its current form and requires significant reform.
Political Reactions
Lewis Cocking, Conservative MP for Broxbourne and member of the HCLG committee, told The Telegraph: “Stamp duty should be abolished. We need to make things easier for people at every stage of the housing ladder, whether that’s young people starting out or pensioners looking to downsize. The Government should not be penalising aspiration with a tax that punishes people for wanting to get on with the next stage of their lives.”
He added: “Rather than focusing on hiking tax, the Chancellor should pay serious attention to this report and bring forward policies that make life more affordable for everyone.”
Economic Impact
The committee’s report warned: “Stamp Duty Land Tax is a transaction tax that puts barriers in front of people seeking to buy a new home. Despite a discount for first-time buyers, it reduces the affordability of home ownership, slows the property market and ultimately damages the economy. While it is a valuable source of revenue for public finances, it must not be maintained in its current form and needs to be reformed.”
Timothy Douglas, of property trade body Propertymark, said: “Stamp duty is a tax on aspiration. It creates a significant financial barrier for first-time buyers, growing families and older homeowners looking to move, reducing transactions and restricting choice across the housing market.”
