A proposal to spread stamp duty payments across several years is the latest property tax tweak being floated ahead of the November Budget.
The City AM business website and newspaper says it’s amongst changes to property tax being considered by the Treasury ahead of Budget discussions with the Office for Budget Responsibility (OBR) beginning next month.
Buyers would to allowed to pay the tax across a number of years through regular instalments rather than via a lump sum at the time of purchase.
A report by the Tony Blair Institute for Global Change last year suggested a government loan that allows the stamp duty payment to be made gradually over a number of years.
Joe Nellis, economic adviser at accountancy firm MHA, says the proposal, if put into effect, could reshape the housing market.
He says: “Breaking stamp duty into instalments would lower the cash needed at the point of purchase, unlocking capital and giving buyers more breathing room for deposits, moving costs, and renovations. This could boost market activity, making it easier for households to move and potentially supporting housebuilders with stronger demand.
“But the policy comes with trade-offs. The Treasury would wait longer to receive revenue, adding to near-term borrowing needs. There is also a risk of missed payments if buyers default or sell before completing their instalments. Banks could treat the recurring tax as a financial commitment, trimming the amount they are willing to lend — partly reducing the affordability boost.
“Unless housing supply rises, spreading payments could simply push prices up by encouraging more demand into a market already short on homes. But if implemented carefully, the reform could help unlock transactions and improve market fluidity. Poorly designed, it risks being a short-term stimulus that leaves public finances exposed.”
This is just the latest idea for property tax reform floated by Chancellor Rachel Reeves and her political and civil service officials.
Earlier this week a poll of estate agents showed strong support for another Reeves idea – to effectively scrap stamp duty for all but the most expensive homes and instead instigate an annual property tax.
Some 44% of estate agents argue that the new levy should be focused only on higher-value homes, while 79% favour abolishing SDLT outright without introducing a replacement.
And 66% either strongly or somewhat support the notion of potentially replacing SDLT with a seller-side levy, compared with just 13% who oppose it.
Changes to capital gains tax, council tax and inheritance tax have also been rumoured in recent weeks, often in leaks from government to test reaction to the proposals.
You can read the full City AM article on the latest Reeves proposal here.
This article is taken from Landlord Today