Chancellor urged to scrap stamp duty to solve housing crisis

Chancellor Philip Hammond is being urged by a leading think-tank to scrap stamp duty to boost the economy and help solve the housing crisis.

The Adam Smith Institute said that stamp duty was “gumming up” the housing market and keeping people in houses that are too large for their needs.

The think-tank believes that scrapping stamp duty would boost growth by £10 billion and improve the fundamentals of the housing market at “a stroke”.

The report said that the tax -which raised £12 billion for the Treasury last year – penalised older people for downsizing after their children have left home.

Stamp duty also stops larger homes from being sold to new families, effectively reducing the supply of family-sized homes even further.

It also creates a roadblock to people moving across country to another to find work, trapping them in low pay.

The report proposes abolishing the tax and covering the cost by raising council tax bills on the most expensive properties in the country.

Sam Bowman, executive director of the Adam Smith Institute, said: “Stamp duty is the worst tax we’ve got, almost as bad as setting fire to the money instead of raising it in tax. The reason is that Britain’s productivity problem is in large part a mobility problem.

“People cannot move to where the best jobs for them are because the houses aren’t being built, and that’s made even worse by stamp duty keeping older people in family homes that are too large for them.

“Stamp duty is gumming up the housing market and keeping people trapped in the jobs that aren’t best for them, and scrapping it should be a no-brainer for a government looking for a bold, affordable way to take back control of the agenda in British politics.”

[box style=”4″]

What Mortgage has teamed up with London & Country to offer you expert advice on the right mortgage deal.

Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.

[/box]