Stamp duty has stagnated London's housing market and pushed down prices, according to research released today.
London sales volumes have fallen by seven per cent, and prices in some parts of the capital have fallen by as much as seven per cent, a report by estate agent Aston Chase has found.
In 2014, then chancellor George Osborne raised the rate of stamp duty on homes worth more than £937,500.
He later introduced a three per cent stamp duty surcharge on second homes, a measure designed to cool buy-to-let investment and make room for first-time buyers in the marketplace.
However, London-focused estate agents are not happy about the changes because sales volumes have dropped dramatically.
Aston Chase said the tax needed reforming.
Mark Pollack, founding director of Aston Chase, said: “Stamp duty is a property transaction tax which has no sound economic basis. It is simply a charge on moving house, which may reduce a person’s ability to move for work, and encourages people to live in homes that are too large (or small) for them. What is required is an annual or exit tax, rather than an entry tax.
“If the government want to retain stamp duty then there is a very strong case for reforming the structure of the tax so that it simply applies to the value of a property above a threshold rather than the whole value."