It’s time to rein in this tax on freedom
An eye-watering 1,100%. That’s how much the top rate of stamp duty has soared by over the past decade, says James Bartholomew. Between 1984 and 1997, house sellers paid a nominal levy of just 1%, but today the most expensive properties (those priced at more than £1.5m) face a 12% tax, and the rate for even £250,000 houses has risen fivefold to 5%. This has brought in cash for the Treasury, but at a great cost to the country. An academic study published last week confirmed what many people already knew, concluding that these penal transfer taxes are an “inefficient way of collecting tax revenue” and “likely have very substantial detrimental effects on the functioning of the housing market”. The study found that people across all stamp duty bands were moving less often in order to avoid the levy. People who wanted to downsize, or to relocate for personal or job reasons, were opting to stay put. Stamp duty is therefore acting as a “tax on freedom”. Ministers should cut the rate to 1% again. It might hit the Exchequer, but then, so will HS2 – and it would also allow people “to live happier, more flexible lives”.