Stamp duty is stopping 29,000 housing deals from happening EVERY YEAR
Kimberley Vaughan, 27, and her husband Robert, 40 claim they have been put off buying due to the controversial tax as a new report claims that 146,000 homes could have been sold if Stamp duty didn't exist
HUNDREDS of thousands more homes would have been bought or sold over the last five years if there was no stamp duty.
There would have been an extra 146,000 property deals - more than 29,000 a year - between 2012 and 2017 if the controversial tax didn't exist, according to data by bank Santander.
It claims the tax is "stifling" all aspects of the property market by fuelling the housing crisis and making it difficult for both first-time buyers and older, wealthier owners wanting to downsize to move.
One couple worried about buying their first home because of how much they'll have to pay in tax are Kimberley Vaughan and her husband Robert.
The couple, who've been married for nearly two years, are currently saving around £400 a month to try and buy a three bed home for around £300,000 in Thurrock in Essex.
But the dream of buying their first property seems even further away once the controversial tax is taken into account.
Kimberley, 27, said: "It's so difficult knowing that even if we get enough for a deposit to buy you've then got the stamp duty on top.
"On a £300,000 home, it means we'll have to find an extra £5,000.
"That's six months rent for us - six months extra we'll be playing someone else's rent."
Chancellor Philip Hammond is expected to announce a cut to the tax for first-time buyers in next week's budget.
Last month he was urged to axe Stamp duty completely by the Adam Smith Institute.
Police officer Kimberley would welcome any move which helps first-time buyers get on the property ladder.
"It would be really helpful for us if there was a cut," she said.
"We've saved around £15,000 for a deposit and we still have a hell of a long way to go.
"But anything so you don't have to save even more to move would be a big help.
"New homes are being built so slowly and the ones that are are so expensive.
"When wages are low and bills are going up, you haven't got the flexibility to save as much as you want."
With Stamp duty proving so controversial, some developers have started offering to pay the tax for first-time buyers.
But even those who have bought their first home and are looking to move up the ladder are finding it difficult to cover the cost of the tax.
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Santander's report also claims that developers have been discouraged from building more homes because even though the tax is paid by the buyer, the seller is likely to sell at a lower price because of Stamp duty which impacts their profit margins.
It found that the rate of house building is down around 50 per cent in the past four decades - from 327,000 per year in the 1970s to just 164,000 per year in the 10 years up to 2016.
Miguel Sard, mortgage director at Santander, said: "The report highlights the unintended consequences of stamp duty.
"First time buyers struggle to get on the ladder, young families want to move up it and the elderly want to downsize, but all are stifled by stamp duty."
How can Stamp Duty be fixed?
STAMP duty is a billion-pound revenue raiser for the Treasury, but critics say it is slowing down transactions and stopping first-time buyers getting on the property ladder. But can it be fixed? Here are some of the options.
A Stamp Duty cut?
An exemption or cut in Stamp Duty would make it cheaper for buyers to get on the property ladder.
There was a Stamp Duty holiday for first time buyers between 2010 and 2012, but it created a rush of transactions before the deadline, followed by a slump.
Incentives for older homeowners to move
Buyers need actual properties to move into, but current owners may still be holding on to their family home despite the kids leaving, or may have nowhere suitable to buy.
Lower the rates for everybody
Agents say the biggest slowdown in transactions has been in the £1million-plus market.
You may have little sympathy for millionaires, but this creates a blockage at the top of the market that affects the flow of transactions down the chain.
Lowering the rates for everyone could help speed up transactions.
Make sellers pay for Stamp Duty
Shifting Stamp Duty from buyers to sellers would mean first-time buyers pay nothing, while those moving up the ladder would have a lower tax charge.
This idea has been floated by Yorkshire Building Society as well as estate agents, but something would need to be done for downsizers who would end up paying more under the new system.
Leave Stamp Duty but increase supply
There is little point pushing up demand with all these incentives if there aren’t enough properties.
Surveyors say more homes are needed to keep prices down.
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