The Chancellor is reportedly considering a proposal to spread stamp duty payments across several years in a bid to drive growth and boost the housing market.
It is among changes to property tax that are being considered by the Treasury, ahead of Budget discussions with the Office for Budget Responsibility (OBR), according to City AM.
Stamp duty is a tax paid when a property is purchased, and rates vary due to multiple factors, including how much the home is worth, and whether it is a primary or second residence.
Experts have long supported changes to the tax, suggesting it will help more buyers get on the property ladder and encourage growth in the industry.
Richard Donnell, executive director at Zoopla, said: “Stamp duty is a big cost for many buyers that can put them off purchasing a home. Reducing the barriers to people moving home is important for economic growth and to support more home building.
“Staggering the payment of stamp duty is a great proposal as it would help unlock more home moves, especially in areas with the highest home values and the biggest costs for home buyers.
“The real answer, long term, is to remove stamp duty all together but as a tax that generates over £10bn a year it is a tough one to reform.”
Four in five homeowners pay stamp duty, with the levy also hitting two in five first-time buyers.
The greatest burden is on those buying in southern England where 60 per cent of all stamp duty is paid, according to Zoopla.
Professor Joe Nellis, economic adviser at MHA, the accountancy and advisory firm, said the possible move by the Treasury would be “a change that could reshape the UK housing market”.
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He added: “Breaking stamp duty into instalments would lower the cash needed at the point of purchase, unlocking capital and giving buyers more breathing room for deposits, moving costs, and renovations.
“This could boost market activity, making it easier for households to move and potentially supporting housebuilders with stronger demand.”
However, he said the policy comes with trade-offs.
“The Treasury would wait longer to receive revenue, adding to near-term borrowing needs. There is also a risk of missed payments if buyers default or sell before completing their instalments.
“Banks could treat the recurring tax as a financial commitment, trimming the amount they are willing to lend – partly reducing the affordability boost,” he said.
He added: “Unless housing supply rises, spreading payments could simply push prices up by encouraging more demand into a market already short on homes.
“But if implemented carefully, the reform could help unlock transactions and improve market fluidity. Poorly designed, it risks being a short-term stimulus that leaves public finances exposed.”
The Tony Blair Institute for Global Change previously proposed reforming stamp duty by allowing buyers to spread payments over 20 years via a government-backed loan.
It said this could be cancelled if the borrower moves within the same period, as the typical homeowner lives in their property for 26 years.
A Treasury spokesperson said: “The Chancellor makes tax policy decisions at fiscal events. We do not comment on speculation around future changes to tax policy.”
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