The new levy would be paid by on houses worth more than £500,000 when sold, with the amount due determined by the value of the property and a rate set by the Government
The Treasury is reportedly considering plans to raise money from a tax on the sale of homes worth more than £500,000.
Government officials are looking at a potential national property tax, which would replace stamp duty on owner-occupied homes, The Guardian reported. No final decision has been made, but it is thought this national tax could help build a model for local levies to replace council tax in the medium term.
Buyers pay stamp duty under the existing framework, if they purchase property worth more than £125,000. The new levy would be paid by owner-occupiers on houses worth more than £500,000 when they sell their home, with the amount due determined by the value of the property and a rate set by the Government.
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The change could help bring in extra revenue without breaking Labour’s promise to not raise levies on working people. Chancellor Rachel Reeves will unveil any changes to the Government’s tax policy at a fiscal event, such as a budget.
However, Kirstie Allsopp, property expert, told Times Radio that the Chancellor’s plans to reform stamp duty would have a “destabilising effect” on the property market. She said: “Don’t fly kites like this. It is really destabilising for the property market. And when I say the property market, I mean people’s homes and their mortgages and homes affect their relationships, their jobs, their education, their wellbeing in almost every way you can think of. It’s not the place to fly kites.”
She added the government should not be “punishing people” for making sacrifices to buy their own homes.
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A spokesperson for the Treasury 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 £6.8bn and cut borrowing by £3.4bn.
“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.”
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