The Treasury is reportedly considering replacing stamp duty with a new property tax on homes valued over £500,000. This proposed tax would be paid by owner-occupiers upon selling their property, with the amount based on the property’s value and set by the government.
The potential new tax system would not impact stamp duty on second homes. Final decisions on these plans have not been confirmed, as reported by The Guardian. Any announcements regarding changes, if made by Chancellor Rachel Reeves, would likely occur during a fiscal event like the Budget.
Currently, buyers in England and Northern Ireland pay stamp duty on properties exceeding £125,000, with a lower threshold of £300,000 for first-time buyers. The Treasury emphasized the focus on growing the economy to strengthen public finances, mentioning planning reforms expected to boost the economy by £6.8 billion and reduce borrowing by £3.4 billion.
The commitment to keeping taxes low for working individuals was reiterated, highlighting the protection of income tax rates and national insurance contributions in the previous budget. Stamp duty rates differ in England, Northern Ireland, Scotland (known as land and buildings transaction tax), and Wales (known as transaction tax).
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