The chancellor Rishi Sunak is once again being urged to abolish stamp duty and replace it with a new levy.
The think tank Bright Blue argues that scrapping the stamp duty holiday would stimulate greater activity in the housing market.
It wants to see stamp duty abolished, along with council tax, and both replaced with an annual property tax instead.
The new annual proportional property tax (APPT) would seek to raise the same amount for the government as existing property taxes, but more closely reflect the value of homes than the current system that includes council tax valuations dating back to 1991.
Ryan Shorthouse, chief executive of Bright Blue, the think tank that published the report, said it would help to level up the UK by focusing taxes on the better-off.
He commented: “The current property taxation system in England is regressive and distortive. It provides significant advantages to those who have – or are from families with – substantial wealth, and is quite punishing to those with relatively little.
“An APPT system would change that, making property tax liabilities much more manageable for those from modest backgrounds and areas.”
The new property tax, which would charge the owner 0.11% of the property’s value each year for the central government, plus a local charge set by councils, has been proposed by economists Paul Cheshire and Christian Hilber and backed by politicians including Labour’s Margaret Hodge, Conservative Lord Willets and Lib Dem Sir Vince Cable.
Homeowners in areas with low property prices would typically be better off under the proposal.
A poll by The Telegraph, which attracted over 5,000 votes, found that 75% oppose the proposal to scrap council tax and stamp duty and replace them with an annual wealth levy on housing.
A Government spokesperson said: “An annual house price tax would mean soaring bills for many hard-working families and pensioners who have saved and improved their homes. We have no plans to make these changes.”
Buying agent Henry Pryor yesterday took to Twitter to pose the following question: ‘Would you rather pay tax when you buy a property (roughly £10k on an average home) or pay an annual tax of 0.11% (0.14% for 2nd home) of the value of your home?
Result (440 votes):
53% Stamp Duty Land Tax
47% Annual Property Tax