Chancellor backtracks on plans for stamp duty reform

Chancellor Sajid Javid has moved swiftly to backtrack on claims he is considering changing the way in which stamp duty land tax (SDLT) is levied, so it moves from the purchaser to the vendor of a property, although he has indicated an overhaul of the tax regime for buying and selling homes is a top priority

In a weekend interview in the Times, his first in his new role, Javid said he was contemplating a change to SDLT which would switch responsibility for paying the tax from buyers to sellers.

Such a move would mean first-time buyers never pay any SDLT, and would also assist those looking to move up the housing ladder. However, it would result in larger tax bills for homeowners looking to downsize.

Currently, only first-time buyers of a property valued at under £300,000 are exempt from SDLT, which brings in around £9bn a year for the Treasury.

In the article, Javid stated: ‘I’m a low-tax guy. I want to see simpler taxes.’ He said that he was looking at various options when asked about SDLT reforms including reversing liability from those buying property to those selling.

However, Javid has now put out a tweet saying he is not committed to the proposal. In a tweet sent out the Chancellor stated: ‘More speculation about stamp duty this morning. To be clear, I never said to @thetimes I was planning to put it on sellers, and I wouldn’t support that.

‘I know from @mhclg that we need bold measures on housing - but this isn’t one of them.’

His initial declaration was welcomed by the Association of Accounting Technicians (AAT), which has been campaigning for this change for several years. The association said it met Boris Johnson to discuss the plans earlier this summer and has already had an exchange of correspondence with the new Chancellor on the idea. The organisation has also engaged with numerous civil servants, special advisers and politicians from across the political divide on the issue.

Phil Hall, AAT head of public affairs & public policy, said: ‘AAT is naturally pleased that the Chancellor has publicly acknowledged he is giving serious consideration to our proposals. AAT does not believe switching SDLT liability is a panacea, but it would be considerably fairer, simpler, more effective and cheaper than the current stamp duty regime.’

In the Times article, Javid also indicated the lowest paid workers would be the first priority for tax cuts but also suggested rates could be cut for higher earners if that raised extra revenue.

He said: ‘If you are going to have tax cuts, I think you should always be thinking about the lowest paid.

‘I think taxes should be efficient. We want to set them at a rate where we are trying to maximise revenue, and that doesn’t always mean that you have the highest tax rate possible.’

Pat Sweet | 19-08-2019

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