The Treasury is reportedly contemplating a potential replacement of stamp duty with a new property tax applicable to homes valued over £500,000. Under this proposed scheme, homeowner-occupiers would pay the tax upon selling their property, with the amount determined based on the property’s value and a rate established by the government.
However, it is noted that the new tax would not override existing stamp duty regulations for second homes. The Guardian has reported that a final decision on the implementation of these plans is still pending.
Any official announcement regarding these changes, if made by Chancellor Rachel Reeves, would likely occur during a fiscal event like the Budget. In the current system, buyers in England and Northern Ireland are required to pay stamp duty when purchasing properties exceeding £125,000, with a reduced threshold of £300,000 for first-time buyers.
A Treasury spokesperson emphasized the focus on growing the economy to fortify public finances. They highlighted that policy changes are not the sole means to achieve this, citing planning reforms anticipated to boost the economy by £6.8 billion and reduce borrowing by £3.4 billion. The spokesperson reaffirmed the commitment to maintaining low taxes for working individuals, as evidenced by the protection of income tax rates and employee national insurance during the previous budget.
Stamp duty rates differ in England, Northern Ireland, Scotland (where it is known as land and buildings transaction tax), and Wales (where it is referred to as transaction tax).
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