Since the 2014 autumn statement, stamp duty land tax (SDLT) on residential property purchases has
been applied at a marginal rate of 2 per cent between £125,001 and £250,000, 5 per cent between
£250,001 and £925,000, 10 per cent between £925,001 and £1.5 million and 12 per cent over £1.5
million.
Stamp duty reduces people’s willingness to buy property, which in turn means that people fail to
move homes when it suits their requirements, such as for a new job or to reduce their housing
costs when adult children have left home after education. This gets in the way of the housing
market reallocating homes when circumstances change. Older home-owners stay in family homes
which could be better suited to younger, growing families, and workers who do take new jobs
sometimes accept longer, less pleasant commutes because stamp duty means it’s just not worth
moving.
Over the next four years, house prices are forecast to rise by 12 per cent, on average. Unless the
government increases thresholds and/or cuts rates the burden of stamp duty will increase, and the
problems explained above will be further exacerbated. This research note estimates how stamp
duty bills are likely to change by 2021-22 in England and Wales.