What if sellers had to pay stamp duty instead of buyers?
Figures released by HMRC show that 241,000 first-time buyers have benefited from First Time Buyers Stamp Duty Relief (FTBR), which helps most but not all first-time buyers avoid paying Stamp Duty.
For properties that cost up to £500,000, first time buyers pay no stamp duty on the first £300,000 but are then liable for the remaining amount, up to £200,000.
The AAT points out that FTBR will cost the taxpayer £670m by 2021-2022, with an additional £5m a year cost following its extension to shared ownership properties last year.
As well as being costly to the taxpayer, the AAT notes that many first time buyers in London and the South East are missing out on the relief, given the average house price in July 2018 was £485,000 and £327,000 respectively.
With this in mind, the professional body argues that switching the stamp duty liability from the buyer to the seller could help those moving up the property ladder.
Phil Hall, head of public affairs and public policy at the AAT, explained: “Switching stamp duty liability from the buyer to the seller isn’t a silver bullet for our myriad housing problems but it would make the system fairer because those moving up the ladder would be paying duty on the lower-priced house that they are selling, not the higher-price one they are buying.
“It would also remove every single first time buyer from liability, irrespective of the cost of the house they are buying.”
The AAT estimates that this change would save the taxpayer £700m a year and would protect the billions of pounds that stamp duty raises for the government.