Halve stamp duty on homes over £500k, says think tank

STAMP duty could be halved for all homes worth more than £500,000 in a bid to make it easier for pensioners to sell larger properties and make room for growing families, under plans being considered by Boris Johnson.

The charge could also be scrapped on all homes under £500,000 if Mr Johnson were to be elected new party leader and prime minister next week.

The £3.3billion cost of changes to stamp duty will be covered by taxes on non-uk resident buyers, vacant homes and people buying second homes.

The plans – to be formally published on Monday – are set out in a 36-page report for the think tank Onward, co-authored by Chris Philp MP, who was the Tory party’s policy chief until May this year, and Will Tanner, a former No10 policy adviser.

The paper even suggests the next PM should abolish stamp duty altogether, despite the measure costing £5.1billion. “This should be seriously considered”, the report says.

The document is being considered by policy advisers on Mr Johnson’s team. One source said: “Key figures on Boris Johnson’s team are studying it carefully and are very interested in it.”

The Daily Telegraph has been campaigning to reform stamp duty amid fears it is stifling the housing market. Last month, Mr Johnson told party members that he backed changes because the tax was causing “huge problems” in London and “freezing the property market”.

Home ownership over the past 20 years has fallen from 71 per cent to 63 per cent. Among those in their 20s or 30s, rates have nearly halved.

The Onward report says: “Taken together, the changes proposed in this paper will help tilt the playing field back towards owner-occupiers and provide a powerful signal that this Government believes in home ownership.

Mr Philip said of the proposed stamp duty changes: “They will get the whole housing market moving – and help make sure we are making the best use of housing stock by making it easier for older people in large houses to move, allowing growing families to move in.”

A spokesman for Mr Johnson declined to comment.