According to the TaxPayers’ Alliance (an independent grassroots campaign for lower taxes), stamp duty is a “badly-designed tax which gums up property markets” and should be phased out entirely. They are particularly scornful of the 3% added stamp duty surcharge introduced in April for buy-to-let and additional homes, as the inevitable impact of it is to drive up rents for tenants.
They are not the only ones saying stamp duty should be done away with entirely. Both the Mirrlees Review and the 2020 Tax Commission concluded that it would be better to get rid of it.
Because the housing market deals with such large amounts of money, even small changes have a big impact. Research by Walbrook Economics clearly showed that activity in the housing market is closely tied to its rate. Therefore, it calls into question the revenue such a tax is capable of generating, and whether it is worth it when taking into consideration the wider economic implications of hampering the market.
In their report titled ‘Taxing Tenants’, the group is also highly critical of the income tax changes that will charge landlords for gross profit from rental income without first deducting finance costs; and also of landlord licensing schemes and other measures that result in additional costs for landlords that will then be passed on to tenants.
With regard to solving the housing crisis, they say it is necessary to liberalise planning restrictions to free up land for development and address the chronic lack of supply.