Stamp duty should be paid by sellers, not buyers, according to the Yorkshire Building Society. The mortgage lender has asked the government to consider reforming the widely unpopular tax, to make it payable by those who are selling their homes instead of those buying.
At present, stamp duty is paid by anyone buying a property. A surcharge was introduced earlier this year, adding three percent to the rate for anyone buying a second property.
Yorkshire Building Society claims that making a seller pay the rate would increase the number of transactions and help young people to buy. According to figures released by the lender, first time buyers would save an average of £3,791, helping them to buy 15 months earlier, based on someone saving £250 per month. It is claimed this would lead to an extra 16,000 transactions in the first year of changes, including 6,000 first time buyers.
There are no indications that the government has any plans to change the current stamp duty model.
Reacting to the proposals, Linda Kirk, Head of Conveyancing at Stephensons: “If stamp duty is indeed the cause of the ‘housing crisis’ – as Yorkshire Building Society suggests – then shifting the responsibility to sellers, rather than buyers, is merely moving the problem elsewhere in the market.
“For our first-time buyer clients, we find that the most significant barrier to securing their first home is being able to satisfy mortgage lender’s affordability criteria, rather than stamp duty.
“Furthermore, the increased cost of selling a property will make those who are considering a sale less likely to proceed. This means fewer properties on the market and fewer opportunities to buy for those yet to make it onto the property ladder.
“At present, all sellers are able to offer to pay for the stamp duty to speed up the transactions, which goes some way to addressing Yorkshire Building Society’s concerns.
“What has not been discussed is the temporary removal of stamp duty for properties in a certain price bracket, as was done during the last financial crisis. This could give buyers significantly more freedom to pursue a purchase, without an extra expense being placed on the seller.”