Should sellers pay property stamp duty on sales?

While the idea has been mentioned more times than we care to remember, Sajid Javid, the new Chancellor of the Exchequer, is looking at property stamp duty on sales. At the moment buyers take on this financial burden which kicks in at transactions over £125,000 in value. So, could we realistically see stamp duty switched from buyers to sellers?

Low tax environment

The new Chancellor has already mentioned on numerous occasions that he is a “low tax guy” and will simplify the UK tax system. When a Conservative government talks about low taxes this generally means a reduction in taxes for those at the higher end of the income spectrum. Like the pot of gold at the end of the rainbow, tax reductions for those towards the lower end of the spectrum always just seem out of reach. But could this be different? Might Sajid Javid actually do something revolutionary?

Talk is cheap

Property investors have a memory like an elephant. They remember being encouraged to invest in buy to let properties and hammered with higher taxes. Social housing and student accommodation has also utilised the funding of private investors when public funds were in short supply. Like a cheap suit, investors can spot cheap talk a mile off. After all, why would the UK government threaten its already weakened income streams?

Root and branch reform

The UK taxation system is like a maze, you can be led down various paths only to hit a dead end with nowhere to go. The constant squeezing of more and more tax from investors can only work for so long before the well is dry. Why not simplify the system?

Like a lazy DIY fan who has taken the easy option of laying wallpaper on top of wallpaper, the taxation system in the UK is in a similar state. The fundamentals of the UK investment taxation system remain unchanged. They have been tweaked, added to, expanded but never ever cleared out and refined as they should be in the modern era. The authorities need to get in there, rip away the spurious layers of taxation and start again.

Investors back in vogue

Since Boris Johnson mounted his trusty steed and headed off for Downing Street there has been constant talk of simplifying the taxation system and helping investors. Rumours continue regarding the repeal of some forthcoming property taxes introduced by Theresa May. We hear promises of billions of pounds of investment in infrastructure outside of London. It is unclear which money tree Boris Johnson will need to shake but he will need to feed the investment market before any more funding is forthcoming.

Changes required

Step back and ask yourself, why do you pay VAT? Why should you pay inheritance tax on assets you leave behind? How come property investors have been the recent cash cow for UK governments? Boris Johnson and his new band of revolutionaries have talked the talk but will they walk the walk? Is Sajid Javid simply diverting attention from current political woes with promises which he might not even be around to deliver?

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