Reports suggest that stamp duty could be replaced by a new property tax on homes valued over £500,000. The Treasury is reportedly considering this idea, which could change our perceptions of buying and selling properties.
Have your say:Would you agree with new property tax on homes worth more than £500k? Leave a comment here to join in the conversation.
Under the proposed system, homeowners would pay the tax when they sell their property. The amount due would be determined by the value of the property, with the rate set by the Government.
Some might view this as a more accurate reflection of the current housing market, while others may see it as another dent in their hard-earned equity. We’re interested in your thoughts on this – please participate in our poll below.
Importantly, the stamp duty on second homes would remain unchanged. The Guardian reports that no final decision has been made yet, but the mere suggestion is already sparking plenty of discussion about fairness, escalating prices, and who should really be paying more.
If Chancellor Rachel Reeves decides to proceed with this, the announcement would likely be made at a significant fiscal event like the Budget, reports the Mirror.
Currently, buyers in England and Northern Ireland are required to pay stamp duty when they purchase a property valued over £125,000. For first-time buyers, the threshold is £300,000.
A Treasury spokesperson said: “As set out in the plan for change, the best way to strengthen public finances is by growing the economy – which is our focus. Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.
“We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”
Officials are also examining whether, following the national tax, a local variant could eventually replace council tax. The concept would be to bolster the precarious finances of local authorities over the medium term. A national tax could potentially be introduced during this parliament. Overhauling council tax, however, would require more time – and would likely only be feasible if Labour secured a second term in government.
These proposals form part of a broader Treasury initiative exploring how to capitalise on the substantial rise in house prices over recent decades – a trend that has driven inequality and left council tax, still tied to early 1990s valuations, appearing increasingly obsolete and unjust. If these proposals were to be approved, they could bolster Rachel Reeves’ political standing.
They would generate additional revenue without breaching Labour’s promise not to hike taxes on working individuals, whilst also being the type of measures that many Labour MPs and members would back.
Have your say:Would you agree with new property tax on homes worth more than £500k? Leave a comment here to join in the conversation.
