UK stamp duty reform urged as first‑time buyers face higher costs

A cross‑party Housing, Communities and Local Government Committee has called for a comprehensive overhaul of stamp duty land tax (SDLT) in England and Northern Ireland, warning that the tax creates “barriers in front of people seeking to buy a new home” and harms the economy. The committee notes that from April 2025 the nil‑rate threshold for first‑time buyers fell from £425,000 to £300,000, pulling a record proportion of newcomers into the tax net – 30% of first‑time buyers in England now pay SDLT, double the level a decade ago, with London most affected.

Members of Parliament, housing experts and pressure groups argue that the current banding and lack of uprating to property price growth make homeownership increasingly unaffordable, especially for those without family support. Options discussed include lowering rates, revising thresholds, or replacing SDLT with a land‑value or proportional property tax – a policy championed by Greater Manchester Mayor Andy Burnham, who says a land‑value tax could fund the abolition of stamp duty if he becomes prime minister.

The Treasury defends the tax as a vital revenue source, but critics say any reform must be paired with alternatives to avoid fiscal gaps. The debate comes as house prices ease in some regions while mortgage rates rise, heightening concerns that the tax could further pressure first‑time buyers.