Housing buyers will pay 40% more bell tax by 2030: Are the highest taxes paralyze the real estate market?

Housing buyers paid £ 13 billion in bell taxes last year, according to the analysis of HMRC figures made by Coventry Building Society.

It represented a 10 percent increase with respect to the 11,800 million pounds sterling that housing buyers paid in 2023.

The increase could be attributed to more people buying homes, to an increase in the timbre tax surcharge paid in second properties since buyers try to complete their purchases before the rates increase in April.

The Budget Responsibility Office has predicted that housing buyers will pay £ 18.1 billion sterling pounds by 2030, which represents an increase of almost 40 percent in income compared to 2024.

As of April 1 of this year, anyone who bought a house will begin paying more bell tax.

Housing buyers currently pay a bell tax if their home costs more than 250,000 sterling pounds. As of April 1, this figure will fall again to £ 125,000, the level at which it was before temporary changes in 2022.

The maximum additional charge for removable companies that do not meet the deadline is £ 2,500.

Buyers for the first time currently pay the bell tax if their home costs more than £ 425,000, which will be reduced to £ 300,000.

Instead of not paying any bell tax for a purchase valued at 425,000 pounds, they will soon pay 6,205 pounds sterling.

A buyer for the first time that buys a house worth £ 625,000 pays £ 10,000 for bell tax. But as of April 1, that figure will increase to £ 21,250, an increase of £ 11,250.

Investors who buy to rent and buyers from second homes already face a 3 percent surcharge above what those who buy a property to live currently pay.

However, since October 30 of last year that figure rose to 5 percent, adding thousands of pounds to the cost of purchase to rent and the purchase of second homes.

According to the previous rules, a property of £ 300,000 with the included surcharge would cost £ 11,500 for bell tax.

Now it has increased to £ 17,500, and starting on April 1 of this year, when the standard types of the bell tax will change, it will increase to £ 20,000.

Buyers outside the United Kingdom who reside abroad pay an additional 2 percent, which represents a general surcharge of 7 percent.

Jonathan Stinton, head of relations with Coventry Building Society, said: “Housing buyers are increasingly paying the tax collector and the situation will only get worse from April, when the thresholds change and the timbre tax invoices increase again. ”

‘It is likely that the fiscal invoice for moving from home, or even buying a first home in some parts of the country, shoots in thousands of pounds.

“Additional income can help treasure, but people will refrain from buying houses if the tax burden becomes too expensive.”

Will the increase in the bell tax affect housing prices?

The government does not hide its desire to raise higher taxes.

Although Foreign Minister Rachel Reeves considers that income tax increases are out of discussion due to the pre -electoral promises of the Labor Party, the bell tax is clearly something that is willing to point.

The additional surcharge of 2 percent of the bell tax on the purchase of second homes, announced in the October budget, was a clear proof of this, and could follow similar measures.

Before the elections, Reeves said that the Labor Party intends to aim at foreign buyers by increasing the bell tax they pay when they buy properties in the United Kingdom.

But although additional surcharges for timbre tax on foreign buyers, owners of second homes and real estate investors tend to receive little public reprimand, increase the bell tax for those who move home and buyers for the first time is more controversial.

People face considerable transaction costs when moving from home, in particular the fees of real estate agents and lawyers, but the bell tax is usually the biggest cost to consider.

The bell tax acts as a deterrent element for both the people who move and for those who rise to the scale of properties, according to Jeremy Leaf, real estate agent of northern London and former residential president of Rics.

He says Timbre Tax ‘It represents an increasing deterrent factor for many housing buyers, especially those in lower price ranges. ”

Leaf adds: ‘His participation is vital to maintain activity throughout the market now that the concession will be withdrawn from April.

‘At least, the types of the bell tax should follow the rhythm of the inflation of housing prices so that it does not become an even heavier load and further reduce market activity.

‘Apart from its enormous impact on first -time buyers, which are the engine of the market, since they tend to negotiate regularly, they are investors, loaded with the most recent penalty, which have dissuaded to buy.

“The reluctance to buy investment properties is reducing stocks and maintaining artificially high rentals, which makes deposits saving even more difficult.”

Arjan Verbeek, founder and executive director of the Perennial Mortgage lender, says that increasing the timbre tax on buyers for the first time disagree with the labor vision of getting more people to access the real estate scale.

He says: “A higher bell tax will only add more friction to the real estate market and harm first -time buyers at a time when we are already in the midst of a affordability crisis.”

‘After a frantic race towards the goal of April, it has the potential to block real estate chains, dragging the market.

‘In addition to first -time buyers, this change will discourage those with larger properties to reduce their size after the children have abandoned the family home.

‘This runs the risk of freezing a critical market segment, which means that young families cannot access a house of the right size.

“Ultimately, this has a domino effect that reaches the bottom of the market, where first -time buyers are again disproportionately affected.”

Should the government reduce the bell tax?

According to Jeremy Leaf, it would be better for the government to charge a timbre tax on the people who sell instead of those who buy.

“The increase in transactions should be the driving force of the government, especially for its impact in much of the rest of the economy in terms of associated businesses such as builders, equipment suppliers, lenders, merchants, etc.,” said Leaf.

‘Rachel Reeves should consider the possibility of distributing even more the cost in the market and considering whether to apply duty to sellers instead of buyers.

“Sellers may enjoy greater payment capacity with accumulated capital, (so) would have a minor negative impact in general.”

Verbeek believes that the bell tax should not be a “unique approach for all” and that certain buyers should be exempt from paying the tax.

“Every regulation must be introduced with nuances and due care to take into account the entire extension of its consequences,” he says.

‘The unique approach has been tested, has been tested and has finally failed.

‘If the chancellor wants to generate growth for the economy, he should consider exempting market sectors from changes in the bell tax to promote “proper dimensioning” and ensure that houses in the market are sold to those who need them the most.’