Speculation has grown overnight that Chancellor George Osborne will reform stamp duty in today's Autumn Statement.
Correspondents were briefed last evening that today's statement may include a surprise on stamp duty, although it was not made clear what this would be.
Two options emerged overnight. The first was that there may be an additional upper tier' of stamp duty, effectively to hit the highest priced properties and to steal the thunder from Labour's mansion tax proposals.
The second was that there would be more fundamental reform, removing the slab system' of stamp duty and making the tax more progressive - ironically along the lines of the new Scottish replacement for stamp duty, the Land and Buildings Transaction Tax. Both the Financial Times and Daily Telegraph today ponder the possibility of this more fundamental reform being announced by Osborne in a few hours' time.
Lenders, estate agents and developers have asked the Chancellor to make the threshold jumps' in stamp duty much smoother', particularly to make it easier for first time buyers to purchase without any risk of having to pay the duty.
Although stamp duty has been dramatically increased over the years, it has not been fundamentally reformed since 1997, when it was paid at just one per cent of the sale value on properties sold in excess of £60,000. Now rates go up to seven per cent - or 15 per cent if the purchaser is a company - for properties worth more than £2m.
The Office for Budget Responsibility says forecast house price rises during the next five years would boost the stamp duty take' going to the Treasury to £18 billion by the end of 2019 - any change announced today would probably try to preserve the total revenue going to the government, but with smoother thresholds.
However, a fundamental reform is unlikely to be in place before the general election, taking place in just over five months' time.
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Comments
Yup, just about got my head around it! It's making more sense...I wonder just how much the MT will effect house prices and sales in London and more affluent areas of Surrey
I take it people are still trying to get their heads round the 'new' system! Don't worry - there'll be an Excel program available soon I'm sure... ;)
There are TOO many CAPITALS in your post. You sound very angry!
Yes, very odd. It's almost as if the Tories are trying to sway voters with panicked, last-ditch policies. Don't fall for the spin.
Now THIS is an excellent idea! Unlike Labour's ridiculous Mansion Tax, which fails in every regard. The fact of the matter is that the Mansion Tax suffers from TOO MANY flaws, issues and problems; TOO MANY of the wrong people get clobbered; TOO MANY of the rich get off scot-free; and TOO LITTLE revenue will be raised to make it worthwhile. All things consider probably the worst tax idea in political history.
The fact that the Mansion Tax is an ECONOMIC FALLACY is just the tip of the iceberg... A recent independent economic study by the Centre for Economics and Business Research (CEBR) has revealed fatal flaws in Labours Mansion Tax. The damning report shows that MT will kill house sales and trigger 2 billion slump in Stamp Duty. Furthermore, it confirms that elderly homeowners, not the wealthy, will be hit hardest; and as if that wasnt bad enough already, that the new tax will not raise the planned 1.2 billion for the NHS. The consequential drop in Stamp Duty alone, the report says, could be even greater than the proceeds of the new mansion tax rendering it pointless. Mr Cox, who commissioned the CEBR study, said: This report shows that Labour [have] got their sums wrong and suggests their calculations were written on the back of an envelope and not properly thought through.
Whereas, a comprehensive updating of the existing STAMP DUTY tax system will actually succeed in raising additional revenue for the Treasury. Wherein, it's somewhat ironic that Labour's Mansion Tax, by causing a 2 BILLION LOSS in STAMP DUTY revenues will in fact do the precise OPPOSITE. That said, it's by no means the first time that Ed & Ed and Labour have got their economics backwards!
A tiered system of Stamp Duty. Just like the old days, when it was a fairer.
Probably less than 6 months to the election.
About time. How many years have people been asking for this, and they decide to act now, 9 months from an election