‘Will sellers pay stamp duty’ has been the question on everyone’s lips in recent days. Rumours have been circulating that the UK chancellor was planning a major stamp duty reform following an interview on Friday.
With speculation going through the roof over the last few days, we’ve trawled through the news cuttings to get to the bottom of what’s going on so you don’t have to.
The ‘sellers pay stamp duty’ rumour – how it started
The speculation kicked off after the UK chancellor Sajid Javid announced in an interview with The Times that he was looking to create a more efficient tax system. He didn’t deny he was considering major reform to stamp duty, telling The Times: ‘I’m looking at various options. I’m a low-tax guy. I want to see simpler taxes.’
The Times reported that the chancellor was ‘looking at various options when asked about stamp duty reforms, including reversing liability from those buying property to those selling.’ So the rumours started to run riot about Mr Javid’s plans for the Budget that will be revealed in the autumn.
What is stamp duty?
Currently, stamp duty is a purchase tax that applies to properties in England and Northern Ireland worth more than £125,000. It currently falls on the buyer to pay the tax.
However, if the tax was switched to sellers it would make house purchases cheaper for anyone buying a first home or climbing the property ladder.
However, on the flip side, it would make it more expensive for owners looking to downsize. ‘The move would hit older people seeking to downsize in particular,’ says Paula Higgins, chief executive of the property advice website HomeOwners Alliance.
‘It would have been bad news for downsizers, who would have to pay a lump sum at the point of sale when many are hoping to free up equity to pay for retirement or help their children and grandchildren move on and up the property ladder,’ Paula adds. ‘It would have been an even bigger barrier to freeing up larger, under-occupied family homes.’
So will sellers pay stamp duty?
According to Sajid Javid, the stamp duty speculation, is just that, speculation. In a tweet, he claimed that shifting the burden from buyer to seller is NOT being looked at.
‘More speculation about stamp duty this morning. To be clear, I never said to @thetimes I was planning to put it on sellers, and I wouldn’t support that. I know from @mhclg that we need bold measures on housing – but this isn’t one of them.’
So, it seems the rumours were a false alarm. However, we’ll be eagerly awaiting to see what the chancellor’s ‘bold measures on housing’ will be.
The chancellor says he hasn’t decided whether to hold the budget before the UK is expected to leave the EU. Until then all we can do is wait.