For years it has acted as a brake on moving house, penalising families for moving and distorting the market.
But replacing it with a blunt new national property tax, as the Chancellor is now reportedly considering, would be a cure worse than the disease.
Such a levy, charged on homes worth more than £500,000, would hit hardest in London and the South East – precisely where housing pressures are most acute. Yet the impact would not remain confined to those postcodes.
When buyers hesitate at the £500,000 threshold, whole chains grind to a halt. Families delay trading up, downsizers stay put, and the knock-on effects ripple through the market.
Developers, seeing demand weaken, hold back from committing to new projects, understandably.
We have already seen how damaging tax uncertainty can be: when Stamp Duty thresholds were adjusted earlier this year, transactions collapsed by 64% in a single month.
That fragility feeds straight into the construction sector. If housing sales slow, developers postpone new sites, contractors delay hiring, and suppliers shelve investment in equipment. Before long, the pipeline of projects runs dry.
For a sector already recording its sharpest fall in activity since the pandemic, a national property tax risks being the final blow.
This comes as firms face mounting pressures on every front.
The recent rise in employer National Insurance has increased the cost of every job, every apprentice and every piece of kit. Those increased costs combined with looming changes to Business Property Relief threaten to land family-run firms with inheritance tax bills they cannot pay, forcing many to sell or close – threatening over 200,000 jobs.
These are asset-rich but cash-poor businesses – and for the 95% of construction plant-hire firms that are SMEs, this combination of rising costs and collapsing demand is simply unsustainable.
This is not about loopholes or avoiding a fair contribution. It is about safeguarding the backbone of Britain’s economy. Family firms employ locally, train the next generation, and supply the machinery that makes every building project possible. Undermine them, and you undermine jobs, skills, and the delivery of new homes.
Labour has set an ambitious target of 1.5 million homes. But piling yet another tax onto homeowners while simultaneously squeezing the SMEs that build for them is a recipe for failure.
If the government is serious about growth and fairness, it must back construction with policies that stimulate demand and reward investment. Penalising home ownership and punishing family businesses will not get Britain building.
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Steven Mulholland is the CEO of the Construction Plant-hire Association
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