UK households could be hit with new property tax 'that would replace stamp duty'
If introduced, the new tax would be paid by owner-occupiers on homes worth more than £500,000 - here is how it could affect homeowners
Stamp duty could be replaced by a new property tax on homes worth more than £500,000 under plans that are reported to be being considered by the Treasury.
If introduced, the new tax would be paid by owner-occupiers when they sell their home. The amount due would be determined by the value of the property, with a rate set by the Government.
The new system would not replace stamp duty on second homes. The Guardian reports that no final decision has been made on whether these plans will go ahead.
If any changes were to be announced by Chancellor Rachel Reeves, it would happen at a fiscal event, such as a Budget.
Under the current framework, buyers in England and Northern Ireland pay stamp duty when they purchase property worth more than £125,000. The threshold is £300,000 if you're a first-time buyer.
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.”
Stamp duty rates explained - see how much you currently pay
Stamp duty rates in England and Northern Ireland
- Purchase price - up to £125,000 (£300,000 for first-time buyers); Rate for main residence - 0%
- Purchase price - £125,001 to £250,000; Rate for main residence - 2%
- Purchase price - £250,001 to £925,000; Rate for main residence - 5%
- Purchase price - £925,001 to £1,500,000; Rate for main residence - 10%
- Purchase price - £1,500,000 and above; Rate for main residence - 12%
Stamp duty is known as land and buildings transaction tax in Scotland
- Purchase price - up to £145,000 (£175,000 for first-time buyers); Rate for main residence - 0%
- Purchase price - £145,001 to £250,000; Rate for main residence - 2%
- Purchase price - £250,001 to £325,000; Rate for main residence - 5%
- Purchase price - £325,001 to £750,000; Rate for main residence - 10%
- Purchase price - £750,000 and above; Rate for main residence - 12%
Stamp duty is known as transaction tax in Wales
- Purchase price - up to £225,000; Rate for main residence - 0%
- Purchase price - £225,001 to £400,000; Rate for main residence - 6%
- Purchase price - £400,001 to £750,000 ; Rate for main residence - 7.5%
- Purchase price - £750,001 to £1,500,000 ; Rate for main residence - 10%
- Purchase price - £1,500,000 and above ; Rate for main residence - 12%
