Parliamentary Committees and Public Enquiries
 Printable version
|
Reform stamp duty to help get first-time buyers on the housing ladder, says Housing Committee
The Government must reform stamp duty as part of a package to help first-time buyers to afford a home, says the Housing, Communities and Local Government (HCLG) Committee in a report published yesterday.
The cross-party committee report states that stamp duty is a valuable source of revenue for public finances and recommends the government launch a consultation, by the end of 2026, to examine potential alternatives.
The report recommends that stamp duty reform takes place alongside a reform of council tax, which the committee called for in a previous report on local government finance.
Chair comment
Florence Eshalomi MP, Chair of the Housing, Communities and Local Government (HCLG) Committee said:
“Rates of home ownership in England have declined over the last 20 years. For many people, and especially for those unable to draw upon the bank of Mum and Dad, the prospect of owning a home is little more than a pipe dream. No silver bullet exists but the government can apply a range of supply and demand-side measures to help people get on the property ladder.
“Progress on delivering the 1.5 million new homes in this Parliament is vital. Councils should also be empowered to play a greater role in housebuilding and given additional powers to bring empty and under-occupied homes back into residential use.
“Reform of stamp duty is necessary but, especially given the public finance implications, this cannot be done in isolation or without a credible alternative in place. We urge the Ministry of Housing, Communities, and Local Government and HM Treasury to consult on alternatives to stamp duty that can deliver long-term benefit and not a short-term fix which only distorts the housing market and exacerbates the affordability problem.”
The report notes there are hundreds of thousands of residential properties that are currently empty, many of which have been empty for many months or years, and that bringing them back into residential use could benefit home supply and improve the affordability of home ownership. The report recommends the Government make it easier for councils to take control of empty properties in their local authorities, by clarifying councils' existing powers, and providing new options to recover long-term empty residential properties.
On Stamp Duty Land Tax, the report recommends the government launch a consultation before the end of 2026 into potential alternatives to the current tax. The consultation should consider factors including revenue-raising power, impact on friction in the property market, progressiveness, and fairness. Options to consider could include: a full replacement with a revenue-neutral alternative; a reduction in rates to stimulate transaction numbers; an overhaul of banding thresholds to tie more closely with local property prices and remain relevant over time; and an update to reliefs and exemptions so that they better meet the government's goals.
On building targets, the report calls for Ministry of Housing, Communities and Local Government to publish annual homebuilding targets for each remaining year of the Parliament and to provide updates every six-months on what actions the government has taken to increase homebuilding rates by private developers.
The committee’s report welcomes the replacement of the Lifetime ISA with a new product focussed specifically on supporting homeownership but recommends the product does not include a static property price cap which would make it unusable in some parts of the country.
Further information
Original article link: https://committees.parliament.uk/committee/17/housing-communities-and-local-government-committee/news/214163/reform-stamp-duty-to-help-get-firsttime-buyers-on-the-housing-ladder-says-housing-committee/
