Rachel Reeves considering replacing stamp duty with new property tax: report
The Treasury is considering a new tax on the sale of homes worth more than £500,000 as a step towards a radical overhaul of stamp duty and council tax, the Guardian reports.
According to the newspaper, officials are initially examining a potential national property tax, which would replace stamp duty on owner-occupied homes, sources said.
They are also studying whether, after the national tax, a local property tax could then replace the council tax in the medium term to repair battered local authority finances.
There is increased focus on Reeves and her October budget as the Treasury prepares for a potentially severe downgrade to productivity forecasts from the OBR — a shift that could leave a £20 billion gap in tax and spending plans.
That shortfall, compounded by sluggish growth prospects, rising debt interest costs, and repeated reversals on welfare cuts, has prompted Reeves and the prime minister to begin paving the way for tax increases and policy changes from September, ahead of the autumn budget.
In response, Reeves has called for calm over increasing concerns of tax hikes in her Autumn Budget.
“But just as my focus over the past 12 months has been about kickstarting economic growth for the benefit of working people, so will my next. Because Britain’s productivity problem is not an abstract, technocratic one – it directly affects every working family in Britain who feel they are squeezing every penny to make ends meet.”
When businesses can’t grow, wages stagnate, and there is less money in the pockets of working people. When infrastructure is inadequate, costs rise, and opportunities are lost, she said.
“When skills do not match economic needs, potential goes unfulfilled. With lower productivity, tax revenues go down, and our public services face cuts. And with the world changing, Britain has been left too exposed to global shocks.”
