A call for stamp duty reform and targeted help for downsizers has been made by Coventry Building Society following analysis of HM Revenue and Customs’s latest figures.
Coventry's analysis of the figures, published today (August 22), showed that homebuyers had paid £1.1bn in stamp duty over July.
Additionally, the analysis found that, so far this year, buyers have paid £6.5bn in stamp duty, with the average bill for homebuyers during the first six months of the year being £9,661.
Coventry Building Society head of intermediary relationships, Jonathan Stinton cautioned that this could lead to “swathes of people living in homes which aren’t right for them anymore”.
He explained that most people will want to downsize and save money, but that this could cost thousands of pounds to end up with something which is “ultimately less valuable”.
“There could be many cases where it just doesn’t make financial sense to move,” he added.
The building society added that the current tax regime offers one time support for first time buyers but “does little to nothing to help downsizers” and could therefore deter people from moving.
It also warned that this could impact the supply of larger family homes and prevent people moving up the ladder.
Home movers currently start paying stamp duty at various percentages if the purchase price of the property is above £250,000, Coventry additionally explained.
However, in March 2025, this will revert to the previous thresholds, where home movers will start paying stamp duty if the purchase price is above £125,000.
Stinton added: “The property ladder doesn’t operate as a one way system. There are many people who want to move down the ladder as well as up, but the current stamp duty regime does more to deter downsizers than incentivise them.
“The temporary thresholds are lightening the load for all homebuyers at the minute, but – like the stamp duty holiday before it – it’s short-term thinking which is only giving relief to buyers at a pinpointed moment in time.
“The long-term solution needs to come without a sell by date and aim to support buyers who need to move both up and down the ladder.”
HMRC data
Coventry's analysis follows the publication of figures from HMRC which found that overall stamp duty receipts from the start of the financial year until July were £5bn.
However, this was £2bn lower than in the same period last year.
HMRC suggested that the “significantly” higher receipts from April 2022, compared to the same period in 2021, could be explained in part by the lower tax rates in 2021 to 2022.
These lower rates were due to the stamp duty land tax residential holiday which finished at the end of September 2021, the government body added.
tom.dunstan@ft.com
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