Rising property taxes strain UK homeowners and first-time buyers
- Council tax and stamp duty increases have recently been implemented in the UK.
- The rise in stamp duty will add financial strain on potential first-time buyers.
- Reform of the property tax system is being urged by economists to improve growth and housing mobility.
In the UK, significant increases in council tax and stamp duty were implemented recently, highlighting the challenges faced by homeowners and potential buyers. Council tax bills have risen by 4.99 percent, with the average tax for a band D property reaching £2,280, while stamp duty's zero-rated band has been lowered from £250,000 to £125,000. These changes, enacted by the government, could put considerable financial pressure on first-time buyers, making it difficult for them to enter the housing market. Economists are calling for reforms that would replace these outdated taxes with a single annual property tax to stimulate economic growth and improve housing mobility. Such reforms would potentially help de-gum the housing market, where homes rarely change hands. However, the transition comes with challenges and could disproportionately affect those in less wealthy regions, requiring careful consideration of local government funding and service provision.