The UK chancellor has backed away from the suggestion that he is considering overhauling stamp duty to shift the tax burden from home buyers to sellers in an effort to help people get on to the property ladder.
In an interview published on Friday, Sajid Javid said he was looking to create a more efficient tax system and did not deny he was considering major reforms to stamp duty. “I’m looking at various options. I’m a low-tax guy. I want to see simpler taxes,” Mr Javid told The Times.
But on Sunday, he appeared to backtrack. The chancellor tweeted “To be clear, I never said to The Times I was planning to put it on sellers, and I wouldn’t support that. I know from the Ministry of Housing, Communities and Local Government that we need bold measures on housing — but this isn’t one of them.”
Buyers pay stamp duty on properties worth more than £125,000. It was abolished for first-time buyers on properties up to £300,000 in 2017. The proposal to switch the burden to sellers may assist those on the bottom of the property ladder, as well as families seeking to purchase larger homes. But it would risk creating a glut at the top of the property market, as homeowners might became more reluctant to downsize.
Treasury insiders said that the stamp duty policy had not been floated internally and was “purely speculative”. Allies of the chancellor pointed out that any major tax reform would require legislation, which would be unlikely to pass through the House of Commons in the current political environment.
Officials added that Mr Javid would be focusing on tax reform across the board, albeit with a particular focus on low-income earners. Mr Javid said in his recent interview “If you are going to have tax cuts, I think you should always be thinking about the lowest paid and about how you can try and help them.”
The chancellor declined to set out the details of his tax reform plans and said to “wait and see for the budget,” which is due to take place in November.
“It wouldn’t be any surprise that I think taxes should be efficient,” he said. “We want to set them at a rate where we are trying to maximise revenue, and that doesn’t always mean that you have the highest tax rate possible.”
Mr Javid did not rule out the possibility of holding an earlier budget if the UK was on course to leave the EU on October 31 without a deal.