Chancellor Rachel Reeves is contemplating changing stamp responsibility with a tax paid by the sellers of high-value properties.
It’s thought a nationwide tax may very well be paid by owner-occupiers on homes value greater than £500,000 once they promote their residence, based mostly on the worth of the property.
In the meantime council tax may very well be changed by a brand new native property tax.
The Chancellor is underneath strain to think about extra wealth-based taxes, with Angela Rayner, deputy prime minister, one of many notable proponents.
Simon Gerrard, chairman of Martyn Gerrard Property Brokers, mentioned: “The prevailing Stamp Obligation regime is unfit for goal and has had a chilling impact on the housing market, which is why I’ve lengthy campaigned to reform it.
“It’s good to see that the federal government has understood a few of the points and is taking motion to finish the damaged system. Including additional prices to buying a house has solely lowered transactions, stifled upward mobility and prevented the environment friendly functioning of the housing market.
“This new tax can be paid by the vendor, reasonably than the customer which signifies that it gained’t be the identical tax on aspiration that stamp responsibility presently is.”
He added: “Nevertheless, it’s clear that the federal government is motivated by a want to boost revenues and I’m involved that this new tax goes to be punishingly excessive.
“If that’s the case, you’re going to see a ceiling on the £500k threshold for that band of the market, as folks keep away from falling underneath the regime, after which a major leap in values with nothing in between.
“Costs above £500k will skyrocket as sellers account for the losses brought on by the tax, that was once paid by the customer.
“What most worries me is the impact on households in London. The housing market is way larger in London, which suggests any household residence might be impacted by this new tax.
“If costs surge larger due to this new regime, how will anybody within the capital begin a household? The federal government must suppose very rigorously what the broader repercussions these adjustments may need and act rigorously.
“Thus far lots of its makes an attempt at elevating revenues via tax, such because the stamp responsibility adjustments earlier this 12 months, have backfired.”
