Will stamp duty be abolished? Rachel Reeves' radical property tax plan explained
Briefly

Stamp duty is the primary tax on property purchases in England and Northern Ireland, charged progressively with exemptions for lower-value and first-time buyer thresholds. Current bands leave homes under £125,000 untaxed and impose rates up to 12% above £925,000, generating about £11.6 billion last year. Ministers are exploring replacing stamp duty with a proportional property tax applied to sales of homes valued over £500,000, possibly paid on sale or as an annual levy, initially excluding second homes and buy-to-let. About 30% of English homes and 59% of London listings exceed £500,000, indicating significant revenue and distributional implications.
Chancellor Rachel Reeves is considering a major shake-up of property taxes that could see stamp duty abolished for most home buyers. Instead, a new "proportional property tax" could be introduced, targeting people who are looking at buying a house worth more than £500,000. The plans, still under discussion, aim to raise more money from higher-value homes while making it easier for first-time buyers to get on the ladder. But with rumours of new levies, many are asking the same question: will stamp duty really be abolished?
Stamp duty is currently the main tax paid on property purchases in England and Northern Ireland. Buyers pay it when they purchase a home, with rates increasing as the property value rises. No tax is paid on homes under £125,000 (or £300,000 for first-time buyers). Homes between £250,001 and £925,000 are taxed at 5% on that slice of the price. Above £925,000, rates climb as high as 12%.
According to a report in The Guardian, ministers have asked Treasury officials to look at alternatives to stamp duty, including a new national "proportional property tax." A "proportional property tax" could be applied to homes worth more than £500,000, payable when the property is sold. In some versions of the plan, this tax could even be annual, rather than one-off. Crucially, the changes would not apply to second homes or buy-to-let properties at first.
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