Stamp duty should be paid by house sellers rather than buyers, removing the tax burden entirely for the younger generations struggling to get on the property ladder, it has been suggested.
Yorkshire Building Society argued that switching the burden of the tax from buyers to sellers would save the average first-time buyer £3,791, with Londoners saving the most at £13,171 typically.
Based on putting away £250 per month, this equates to the average first time buyer avoiding 15 months of saving, or four years and four months in London.
It would help more than 225,000 people getting on the housing ladder every year, the Society argued. A total of 225,200 first-time buyers paid stamp duty between June 2015 and June 2016, having purchased a home above the £125,000 minimum threshold.
Stamp duty was reformed in 2014, making the tax cheaper for the majority of buyers liable to pay it. The tax applies in England, Wales and Northern Ireland. In Scotland, stamp duty was abolished in 2015 and replaced with the land and buildings transaction tax.
The amount of duty a buyer pays depends on the cost of the property. Yorkshire argued that the reform would mean that those who have already benefited from sharp increases in house prices in recent decades would bear more of a responsibility for paying stamp duty, rather than those moving up the property ladder who have not seen such a benefit.
Andrew McPhillips, chief economist at Yorkshire Building Society, said: “More than 200,000 first-time buyers paid stamp duty last year and removing this tax burden from them would give the younger generation a major leg up the property ladder.
“This would be felt most of all in London where on average our members pay a staggering £13,171 in duty for a first home.”