UK: Time To Say Adieu To Stamp Duty

Another leading think tank has urged the government to make bold changes to the UK’s tax regime next month, rather than pursing a “half-baked dash for revenue”.

The Institute for Fiscal Studies has released some in-depth analysis into “options for tax increases” in the forthcoming Autumn Budget – including an argument that “SDLT should be abolished as part of a wholesale reform of property taxation”, noting that real estate is “arguably the part of the tax system that needs [wholesale reform] most.”

Chancellor Rachel Reeves has already floated multiple ideas for significant changes to the property tax landscape, including replacing Stamp Duty with an annual levy based on property values, adding Capital Gains Tax to primary residences, updating Council Tax, extending the reach of Inheritance Tax, and even some form of Mansion Tax on high-value homes.

The Conservatives have also declared in favour of a crowd-pleasing update: leader Kemi Badenoch announced last week that her party would “abolish Stamp Duty” if they returned to power.

Reeves will deliver this year’s big Budget speech on 26th November. She is tasked with raising a huge amount of extra tax revenue to fill a £20-30bn “black hole” in the national finances, while sticking to the Labour Party’s manifesto pledge to not raise taxes on “working people” (i.e. not touching the big three levies: Income Tax, VAT or National Insurance).

The IFS believes this is possible, but may not be sensible – warning that “many of the tax-raising options outside the ‘big three’ would have particularly damaging effects on growth and welfare.”