You are here: Home - Mortgages - First Time Buyer - News -

Boris Johnson considering switching stamp duty from buyer to seller

Written by:
Boris Johnson has taken an interest in switching stamp duty payments from buyers to sellers, according to trade body the Association of Accounting Technicians (AAT).

Johnson, who is favourite to become prime minister when Conservative Party members choose between him and Jeremy Hunt later this month, has already proposed an overhaul of stamp duty in a no-deal Brexit scenario.

This would include abolishing the tax for all homes under £500,000 and cutting the higher rate threshold back to seven per cent from 12 per cent.

Now the AAT has revealed it has been in discussions with Johnson about its recommendation to make property sellers pay stamp duty, rather than buyers, which was initially made last year.

An AAT spokesman told YourMoney.coms sister title Mortgage Solutions that the organisation had met Johnson about the proposal following his previous announcement and had since followed-up with him and his team.

Mortgage Solutions has contacted Johnson’s team but has not yet received a reply.

No surcharge changes

The AAT’s proposal would only apply to primary residences, with no changes made to the existing regime for additional residential properties.

Sellers would pay the stamp duty on all properties but on second homes and buy-to-let properties the surcharge for buyers would continue as at present.

Similarly, the additional charge for overseas property investors would remain in place and be payable by buyers, not sellers.

AAT head of public policy and public affairs Phil Hall said the AAT was pleased that Johnson had agreed to look at its long-standing proposal to switch stamp duty liability from the buyer to the seller.

“This will save the taxpayer £700m a year by rendering First Time Buyers Relief redundant,” he said.

“It will also protect the £9bn of revenue stamp duty it generates as it will still be paid in full, simply by different people.

“It is also much more progressive as it will be paid on the lower priced property being sold rather than the higher priced property being bought.”

Benefits and risks

The body believes that the change would increase the amount of house purchases by reducing immediate upfront costs for all home buyers except down sizers, which in turn should free up smaller properties for first-time buyers.

It noted that the majority of down sizers will have little or no mortgage to pay and will have significant equity and were therefore best placed among all homeowner types to pay a little extra, especially compared to first-time buyers.

Risks highlighted included that sellers may simply add the cost onto the asking price of the property.

Other unintended consequences include some downward price pressure on sellers, as the higher the asking price, the greater the amount of stamp duty they will have to pay – and the less likely they are to sell their house.


There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week