Zoopla’s executive director has proposed raising the 5% stamp duty threshold to £500,000, a move that would reduce transaction costs by up to £12,500 for property buyers in southern England.
Richard Donnell, Executive Director at Zoopla, argues the current threshold structure disproportionately affects average-priced homes across the south of England, where stamp duty can represent between 3% and 5% of a property’s value.
Under current regulations, buyers pay 5% stamp duty on the portion of a property’s value between £250,001 and £925,000. For a £600,000 property, stamp duty amounts to £20,000, whilst a £500,000 purchase incurs £12,500 in duty before additional costs such as solicitor fees.
Market impact
“The 5% stamp duty band between £250,000 and £925,000 hits a lot of average buyers of averaged priced homes across southern England,” Donnell said. “These people aren’t buying million-pound homes, but the numbers add up and are a disincentive to move.”
The proposal comes as property reform campaigns gain momentum across England and Wales. Last week, the Conservative Party reiterated its pledge to abolish stamp duty entirely if returned to power, with Shadow Chancellor Sir Mel Stride claiming the move could boost housebuilding by 25%, equivalent to 200,000 homes over five years.
Jeremy Leaf, a London estate agent and former RICS Residential chairman, acknowledged stamp duty’s effectiveness as a revenue generator but questioned its broader economic impact. “The way the tax is levied means it has become a burden on job and social mobility, compromising economic efficiency and reducing liquidity,” he said.
Regional implications
The proposed threshold increase would primarily benefit buyers in London and the South East, where property values typically exceed £250,000. The reform would apply to standard residential purchases, with separate rates continuing for first-time buyers and second property acquisitions.
Donnell’s intervention adds to ongoing debates about property tax reform and housing market liquidity. The current stamp duty structure has remained largely unchanged since the threshold was set at £250,000, despite significant property price growth in many regions.
The proposal represents a more targeted approach than complete abolition, focusing on the middle market segment where transaction costs have become a significant barrier to mobility. Whether the Government will consider such reforms remains uncertain, with no official response to the proposal issued at the time of publication.
