Property Tax: What Are The Treasury’s Plans For Stamp Duty In The New Budget?
The new Budget won’t be released until 3 March, but there has been much discussion this week around the potential plans for Stamp Duty. Chancellor Rishi Sunak is planning to raise taxes in an attempt to re-balance the deficit caused by coronavirus over the past year.
It’s thought that corporation tax is likely to increase, as well as council tax, but many people are nervous about the changes to the Stamp Duty holiday that was implemented in July 2020. The current stamp duty holiday allows buyers of homes of a value up to £500,000 in England and Northern Ireland to pay no stamp duty, or a reduced rate for homes above that.
The Treasury commented: “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity. Its time-limited nature is what has encouraged people to take advantage of the scheme.”
Pressure Is Building To Abolish Stamp Duty
While it looks like there will be no radical changes to property taxes come 3 March, there has been much talk around stamp duty and council tax, with moves in recent days to ditch both completely. Instead, the idea is to replace council tax, stamp duty and bedroom tax with Proportional Property Tax, a flat rate payment based on the value of a property.
The new tax would only be paid by property owners, not tenants, and there would be no exemptions for second homes or undeveloped plots. As well as this, the plan would be to have annual automated valuations for properties, instead of the value of properties taken from 1 April 1991. At the time of writing, more than 100,000 people have signed Fairer Share’s campaign to instigate these changes.
Others are calling for a stamp duty taper as an alternative, which would give a three-month grace period (until 30 June) for sales already agreed and with a mortgage in place.
Only time will tell what the Treasury has planned, so keep an eye on our blog for new posts. You can sign up to our newsletter for updates straight to your inbox.