After the Chancellor scrapped Stamp Duty for first-time buyers up to £300,000, here's 5 reasons why it should be abolished entirely:
According to GOV.UK, 'you must pay Stamp Duty Land Tax (SDLT) if you buy a property or land over a certain price in England, Wales and Northern Ireland.' It is, essentially, a tax levied on documentation - hence, stamps. Recently, Chancellor Philip Hammond scrapped Stamp Duty for first-time buyers up to £300,000, a welcome step - but several groups, including the Taxpayers' Alliance, have called for the duty to be abolished entirely.
The tax suffocates the property market
The tax prevents older homeowners from downsizing, thus preventingroom from being freed up higher up the property ladder, and stopping young families from upgrading to the homes they need. In the midst of a genuine housing crisis, Stamp Duty should be the first chucked overboard. Lord Richard Best, a former Economic Affairs Committee member in the House of Lords and former chief executive of the National Housing Federation, called stamp duty 'a real sticking point for older people'.
The duty hurts renters
The Taxpayers' Alliance warned that the tax hurts tenants, as landlords simply pass the cost of the duty onto their residents. I argued that the same thing happens with Corporation Tax, but with Stamp Duty, the hand-off is forcing people into insecure living arrangements and hiking the cost of living, particularly in areas such as London.
Government revenue shouldn't come at expense of the poorest
Whilst government revenue is obviously important, it shouldn't come at the expense of those struggling to scrape together the means to live. Older people struggling to downsize, and young people looking to add some security to lives already fraught with debt (in many cases) are hurt most by the tax.
Stamp Duty prevents social mobility
With the UK floundering around mid-table in the social mobility leagues, and the recent uproar over governmental policy on the issue - Stamp Duty should be the first thing to go. Property has historically been a sign of social standing, and certainly still is in the contemporary age - and the government should be doing all they can to create a generation of homeowners, rather than concentrating power in the hands of landlords.
It causes economic harm
According to a CapX article, for every £1 raised, Stamp Duty does 75p of economic harm. Those aren't great figures. Economically, most taxes are damaging and are simply necessary evils - designed entirely for redistributive purposes. The article claims, correctly, that it would be better to allow consumers to act freely in the market place, in terms of growth - but Stamp Duty restricts this and distorts economic activity - we act as if things are more expensive than they are and are therefore less sound investments.
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