Replacing stamp duty with a new levy could hit sellers hard because they would be paying two lots of tax for one property, a solicitor has said – as the conveyancing sector gets its head around reforms reportedly being considered by the chancellor of the exchequer.
On Monday, the Guardian reported that Rachel Reeves is exploring the possibility of replacing the stamp duty land tax with a new ‘proportional’ property tax for homes sold for more than £500,000.
Conveyancing solicitor Donall Murphy, a partner at Russell-Cooke, told the Gazette that the reform would be a ‘double whammy’ for sellers as they would have paid stamp duty when they bought their home and a property tax when they sell it. Murphy also questioned how the property tax would stand alongside capital gains and inheritance tax.
Reeves is expected to announce any tax decisions in the autumn budget. But should she decide to replace the stamp duty land tax with a new property tax, the change may not come into force until next year.
Murphy said this could lead to home buying and selling ‘inertia’, with sellers wanting to complete quickly to avoid paying the new property tax but buyers wanting to stall to avoid paying stamp duty.
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