Survey reveals preference for flexible payments over proposed seller-based taxation
Stamp duty reform has emerged as a potential consideration within government fiscal planning, with speculation that modifications to the property transfer tax could be announced in tomorrow's Budget. Recent study sheds light on how both homebuyers and property professionals view various reform scenarios, offering insight into which approaches might gain support across the market.
Research by property portal Rightmove indicates that homebuyers would support a system allowing stamp duty to be paid in instalments rather than as a single upfront amount. The findings also indicate that estate agents would favour this approach over proposals to transfer the tax burden to property sellers.
The distribution of property prices across England underscores the potential implications of proposed reforms. Just under a third of homes for sale in England are priced at over £500,000, the threshold at which the rumoured annual property tax would apply if it replaced stamp duty.
However, this distribution varies significantly by region. In London, more than half of homes have an asking price exceeding £500,000, compared with just 8% in the North East. Similarly, agreed property sales reflect these regional disparities: more than half of sales in London this year have been for homes over £500,000, while in the North East, this figure stands at just 4%. Nationally, a fifth of agreed property sales in England so far this year have been for homes exceeding £500,000.
In a survey of its consumer panel, Rightmove identified that one of the most frequently cited proposals for reforming the stamp duty system involves extending the payment timeline into smaller, more affordable portions. Survey respondents also suggested alternative reforms including regional differentiation of tax thresholds and safeguards for those downsizing.
Estate agents consulted by Rightmove expressed similar perspectives. Most who participated in the consultation rejected the notion of replacing stamp duty with an annual seller tax. The majority believed the existing arrangement either requires modification or should be scrapped entirely.
When comparing potential reforms, agents rated the staggered payment option—aligned with homebuyers' preferences—as preferable to the government's reported consideration of imposing the levy on sellers instead.
"We've been calling for stamp duty reform for some time now, as it's a significant barrier for many people moving home," said Colleen Babcock (pictured right), property expert at Rightmove. "Abolishing it completely would unlock more moves at all stages of the property ladder, but there are also ways the system can be improved.
"Speaking with both home-movers and agents, it's clear the current system is not working. We need to look at ways the upfront payment of stamp duty is not a deterrent for people to move. While getting rid of the tax completely would be an obvious way to do this, making the payment more flexible, fairer regionally, and increasing the zero-rate thresholds would all be an improvement on the current set-up."
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