Treasury ‘looking at' new property taxes to replace stamp duty
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.
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.'
Chancellor Rachel Reeves will unveil any changes to the Government's tax policy at a fiscal event, such as a budget.
Former government adviser Tim Leunig has previously suggested replacing stamp duty land tax with a 'national proportional property tax' levied on house values greater than £500,000, in a paper published by the think tank Onward.
At a rate of 0.54%, with a 0.278% supplement on values over £1 million, the levy 'would raise the same amount as stamp duty'.
Sir Mel Stride, Conservative shadow chancellor, said: 'The Conservatives have warned that more taxes are coming and now reports are emerging that the family home is next in the firing line.
'This tax grab would punish families for aspiring to own their own home.
'Under Labour nothing is safe. Your home, your job, your pension – the Chancellor has all of it in her sights.
'Rachel Reeves will tax your future to pay for her failure.'
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