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Stamp Duty Worsens the Housing Crisis

Story posted: 10.08.17

A recent document prepared by the London School of Economics and VATT Institute for Economic Research found the rate of moving home would be 27% higher if the levy was completely abolished.

Currently, stamp duty costs £143,000 on a £2m property or £20,000 on a £600,000 home.

Professor Christian Hilber, co-author of the report said, “The key message of our paper is that stamp duty hampers mobility significantly. If you are a young family and you have an additional child, you’ll need an additional room, but the stamp duty is discouraging this kind of move because of the additional cost and lack of available homes to move into.

“In a nutshell, the stamp duty discourages the elderly from downsizing and young expanding families from moving to more adequate larger housing.”

During the last election, the Labour Party’s manifesto promised a “New Deal for first-time buyers” cutting up to 40% off the price of a home for people “on ordinary incomes”, as well as giving a two-year holiday from stamp duty charges.

A Treasury spokesman said, “Almost 90% of people want to own a home, but only 63% do. We reformed property taxes including duty to help more people get on to the property ladder. In addition, we are helping people - including young families – to buy their first homes through policies such as Help to Buy and the Lifetime ISA, and the recent £2.3bn Housing Infrastructure Fund which will free up over 100,000 properties in high demand areas.”  


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