Britain's controversial stamp duty system is facing mounting pressure from economic experts and property professionals who argue the tax has become a damaging burden on the housing market and requires immediate reform.
The Mobility Crisis
New analysis reveals the staggering impact of stamp duty on household mobility, with the number of people moving home plummeting by 27% since the tax was significantly increased in 2014. This decline in transactions is creating a stagnant property market that affects everyone from first-time buyers to downsizers.
London Bears the Brunt
London homeowners face the most severe consequences, paying nearly half of all stamp duty revenue despite accounting for just 12.5% of transactions in England. The average stamp duty bill in the capital has skyrocketed to £24,000, creating a substantial barrier to moving and contributing to the city's housing crisis.
Economic Experts Speak Out
Prominent economists are joining the chorus calling for change. Professor Paul Cheshire of the London School of Economics describes stamp duty as "probably the worst tax we've got," highlighting its damaging effects on labour mobility and efficient housing allocation.
The Regressive Nature of the Tax
Unlike progressive income taxes that increase with earnings, stamp duty hits homeowners with large one-off payments that bear no relation to their ability to pay. This creates particular hardship for those needing to relocate for work or family reasons without substantial savings.
Alternative Solutions Proposed
Property experts suggest several reform options, including shifting the tax burden to sellers who have benefited from price appreciation, or implementing a modernised system that reflects today's property market realities rather than one designed decades ago.
Broader Economic Consequences
The negative effects extend beyond individual homeowners. The depressed transaction volume impacts numerous related industries including removal companies, estate agents, and home improvement businesses, creating a ripple effect throughout the economy.
Call for Political Action
With growing consensus about the damage caused by the current system, pressure is building on the government to make stamp duty reform a priority. The upcoming budget presents an opportunity to address what many now see as a tax that's hurting both the property market and the wider UK economy.
