A proposal to spread stamp duty payments across several years, in an effort to drive growth and boost the housing market, is reportedly among changes to property tax being considered by the Treasury ahead of Budget discussions with the Office for Budget Responsibility (OBR).
Suggested reforms to stamp duty would allow house buyers to pay the tax across a number of years through regular instalment’s rather than via a lump sum at the point of purchase.
City AM reports the policy proposal is under discussion, with technical details on how revenue could be protected likely to be fleshed out in negotiations with OBR analysts, which begin in two weeks.
Proponents of the idea to stagger stamp duty suggest that making the tax payable over a longer term would make the labour market more flexible as it would allow people to move more easily. Advocates also suggest it could add some much needed lubrication to the housing market, with stamp duty a major impediment to many would-be house buyers.
Richard Donnell, executive director at Zoopla, commented: “Stamp duty is a big cost for many buyers that can put them off purchasing a home. Four in five home owners pay stamp duty, with it also hitting two in five first time buyers. The greatest burden is on those buying in southern England where 60% of all stamp duty is paid. 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 its a tough one to reform.”
Stamp duty reform could ease buyer pain – but risks a fresh Treasury headache, according to rofessor Joe Nellis, economic adviser at MHA, the accountancy and advisory firm.
He said: ” The chancellor has signalled she may let homebuyers spread stamp duty payments across several years rather than paying the full amount upfront — a change that could reshape the UK housing market.
“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.
“But 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.
“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.
