Calls to cut stamp duty as 1.2m more homes are hit

A MILLION more homes have become liable for stamp duty since the start of the pandemic as Rishi Sunak was last night urged to scrap or cut the tax by Tory MPS.

Rising house prices mean 1.2 million homes that were previously zero rated will now require buyers to pay stamp duty after moving above the initial threshold of £125,000.

A further 3.1million homes have been dragged into higher stamp duty brackets, adding thousands to buyers’ house move bills as they also struggle with the rising cost of living.

Hardest hit will be first-time buyers on the first rung of the property ladder who will also have to raise an extra £4,000 for a deposit compared with two years ago and an additional £5,000 in annual household income to secure a mortgage, according to the analysis by property website Zoopla.

The data prompted demands from senior Tory MPS for Mr Sunak, the Chancellor, to cut or even scrap the tax after raking in receipts of £18.6billion in the year to March 2022, an increase of £6.1billion despite the stamp duty holi- day during the pandemic.

Sir John Redwood, the former Cabinet minister, said: “It is a tax on people improving themselves, on levelling up and on making sure, through the marketplace, that the right people are living in the right houses as it puts people off trading up or down into a size that is more convenient. It is a bad tax.”

He urged the Chancellor to overhaul stamp duty to “optimise” the rates so that taxes were reduced on house buyers to stimulate the market and so increase revenues.

Greg Smith, an ally of Boris Johnson, said it was a “punitive” tax on the “greatest aspiration” of the vast majority of people, which was to own their homes. “My view is that stamp duty is one of those taxes that we should look at getting rid of altogether,” he said.

Kevin Hollinrake, a member of the Treasury select committee and ally of the Chancellor, said stamp duty was a “disincentive to transact which is bad for the economy”.

He suggested the initial threshold of £125,000 could be axed, effectively making the pandemic’s stamp duty holiday for lower-value homes permanent.