This is why RICS – through this month's Residential Market Survey – is eliciting views of residential professionals on the potential impact that shifting SDLT liability could have on the market; whether it would be reflected in higher prices; and what other measures, if any, government could do to improve access to good quality accommodation for everyone.
Historically, RICS has called on the government to undertake a full-scale review of the SDLT regime, as opposed to the current piecemeal approach, and this view has not changed. This review would start with what the government hopes to achieve from SDLT – whether it is revenue generation, market fluidity or another objective; and end with conclusive view on whether the tax is fit for purpose.
The review should also explore the many potential, alternative taxation measures, such as a stamp duty exemption for downsizers; or replacing stamp duty land tax with a reformed council tax.
However, any changes to the system of tax should be considered carefully, as they would have disruptive consequences that could negatively impact activity. Providing an SDLT exemption for downsizers, for example, could free up larger, underused properties; but will likely provide these sellers with a market advantage over other participants. Similarly, replacing SDLT with an altered council tax regime could increase house buying and selling activity; but increase day-to-day living costs at a time when occupiers are already facing higher bills.
Given the state of the housing market, it would be prudent for the government to consider the cumulative impact current taxes are having on behaviour and determine what changes can create a more sustainable and vibrant property sector.
Furthermore, and finally, like any significant tax change, how the tax system could transition from the current regime to a future regime needs to be considered at length.
RICS will continue to pioneer change in the UK housing market through our respected global standards, the trusted insights of our professionals, and the need to effect change for social good.