Stamp duty land tax should be scrapped because it 'damages the economy' and makes buying a home less affordable, according to a committee of MPs. The cross-party Housing, Communities and Local Government Committee said in a report today that while the tax 'is a valuable source of revenue' it 'must not be maintained in its current form'. Stamp duty is charged on house purchases above £125,000 - or £300,000 for first-time buyers - and can add thousands, or even tens of thousands, to the cost of buying a home.A home mover purchasing a £450,000 property would pay £12,500, while someone buying an £800,000 home would pay £30,000. The rate paid is different on different 'slices' of the property's value. A non first-time buyer pays 2 per cent on the portion between £125,001 to £250,000, then 5 per cent on the portion from £250,001 to £925,000, then 10 per cent on the portion between £925,001 to £1.5 million and 12 per cent on anything above that. The committee, chaired by Labour MP Florence Eshalomi, said in its report into housing affordability that the tax 'reduces the affordability of home ownership, slows the property market, and ultimately damages the economy.' Stamp duty: The tax should be reformed to make housing more affordable, MPs have said STAMP DUTY FROM 1 APRIL 2025 Band Stamp duty land tax rate Additional rate for landlords / second homes First-time buyers pay 0% to £300,000 then normal rates apply £0 - £125,000 0% 5% £125,001 - £250,000 2% 7% £250,001 - £925,000 5% 10% £925,001 - £1.5m 10% 15% £1.5m + 12% 17% * No stamp duty is paid on property transactions costing less than £40,000 as these are considered low value and not reported to HMRC It added that a consultation should be launched before the end of this year to consider alternatives to the tax. These, it continued, could include a 'revenue neutral' alternative - meaning a new scheme which would make the Treasury the same amount of money - or a reduction in rates to stimulate property market activity. The Government could also consider changing the current bands and thresholds to 'tie more closely with local property prices' and updating current reliefs and exemptions to 'better meet the government’s goals'.The committee said the consultation should consider factors including 'revenue-raising power, impact on friction in the property market, progressiveness, and fairness.'Purchase price£Is this a buy-to-let or second home? (Higher rates apply)Are you a first-time buyer?First-time buyer zero rate up to £300,000 only applies if buying a home costing £500,000 or less*Transactions under £40,000 do not require a tax return to be filed with HMRC and are not subject to the higher ratesStamp duty chargeEshalomi said: 'Rates of home ownership in England have declined over the last 20 years. 'For many people, and especially for those unable to draw upon the Bank of Mum and Dad, the prospect of owning a home is little more than a pipe dream. 'Reform of stamp duty is necessary but, especially given the public finance implications, this cannot be done in isolation or without a credible alternative in place. 'We urge the Ministry of Housing, Communities, and Local Government and HM Treasury to consult on alternatives to stamp duty that can deliver long-term benefit and not a short-term fix which only distorts the housing market and exacerbates the affordability problem.'The MPs also recommended the review be carried out alongside a rethink of other property taxes, such as council tax. The report also cautioned against short-term 'fixes' and said any changes to stamp duty should be implemented for the long term to avoid distorting the housing market. This effect was seen during the pandemic when the Conservative government put in place a series of stamp duty tax breaks from 2020 onwards. This contributed to rapid house price inflation, followed by a lull in demand when the incentive was taken away by the Labour Government in April 2025 and rates returned to their normal levels. Stamp duty levels are different for buy-to-let landlords and second home buyers. They pay the normal home buyer levy described above, and an additional 5 per cent surcharge on top. This was increased from 3 per cent in October 2024.Non-UK buyers based overseas pay an extra 2 per cent on top of that, so a 7 per cent surcharge overall.An overseas buyer purchasing a £1million London home would pay £113,750 in stamp duty.How to find a new mortgage Mortgage rates have soared after conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts.If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with expert mortgage advice.Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs.Or use L&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you.This is Money's mortgage tips What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it.Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying arrangement fees. If you do this and don't clear the fee on completion, interest will be paid on it over the term of the loan.What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.What about buy-to-let landlords?Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. > Find your next mortgage deal with This is Money and L&CMortgage service provided by London & Country Mortgages (L&C), which is authorised and regulated by the Financial Conduct Authority (registered number: 143002). The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage