Stamp Duty 

Boris Johnson 'open to stamp duty shake up'

Boris Johnson 'open to stamp duty shake up'

The favoured candidate to be Britain’s next prime minister, Boris Johnson, is interested in a shake up of stamp duty rules, according to the Association of Accounting Technicians.

The professional body has campaigned for stamp duty liability to be switched from the buyer to the seller and told FTAdviser that Mr Johnson was keen to learn more about the proposal.

Last year, Mr Johnson (pictured) labelled stamp duty as "absurdly high" and last month said he would consider scrapping it for homes worth £500,000 or less.

According to the AAT, Mr Johnson met with the body and agreed to look at their stamp duty recommendations further, requesting more information and noting their potential.

Switching stamp duty from the buyer to the seller would have numerous benefits, according to the AAT, including helping more people get on the property ladder and increasing the number of house purchases.

First-time buyers already get stamp duty relief on properties under £300,000, some relief up to £500,000 but no relief on properties above £500,000.

The AAT pointed out that £300,000 was less than the average property in London and that a switch of liability would remove the stamp duty burden from every buyer — and every first-time buyer — in the country.

It would also make the system fairer as buyers moving up the ladder would pay the stamp duty on the lower-priced house they are selling, not the higher-price one they are likely to be buying, according to the body.

The AAT stated that crucially, a switch in liability would maintain the substantial multi-billion pound revenue for the exchequer, as although those paying would change the amount would not.

The changes put forward by the AAT do not include a switch for any second homes or buy-to-let properties, where the surcharge would continue as present on the buyer.

Phil Hall, AAT head of public policy and public affairs, said: "AAT is naturally pleased that Mr Johnson has agreed to look at our 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 and protect the £9bn of revenue stamp duty generates."

The AAT also pointed to anecdotal evidence that homeowners were turned away from moving home due to the huge amount of upfront costs, stating that after legal fees, mortgage arrangement costs and stamp duty, many felt it was not worth moving.  

But Kay Ingram, director of public policy at LEBC, said a switch in stamp duty from buyer to seller would simply mean sellers would factor this tax into the price they ask for the property.

Despite this, Ms Ingram agreed that a rethink on stamp duty, including its abolition, should be considered in the interests of a better functioning housing market.

She said: "Stamp duty is now a significant cost to all but first time buyers. 

"There is evidence that the high levels of stamp duty are putting older homeowners off downsizing as well as presenting a substantial barrier to second and subsequent home buyers.