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Rachel Reeves needs to plug a more than4
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billion pound black hole in public
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finances and she's promised not to raise
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headline tax rates on working people.
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So, a property tax is on the table and
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out of everywhere in the UK, it looks
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like it would hit London the hardest.
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The Treasury is reportedly looking into
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a range of options of how to tax
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property and this could be a major part
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of the autumn budget. There could be a
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national property tax based on the value
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of a home which would replace stamp
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duty. Another option is a mansion tax,
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which would involve a capital gains tax
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for the sale of homes over 1.5 million
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pounds. A mansion tax would have major
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implications for London, where a large
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proportion of the capital's housing
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stock has been inflated into the
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multiple millions. The UK has two major
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property taxes at the moment, stamp duty
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and council tax. Council tax bans are
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based on valuations from the 1990s, and
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there has been massive growth in house
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prices since then. This is particularly
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the case in London. The current system
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has led to some owners of multi-million
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pound properties paying similar rates to
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those who own terrace houses in small
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towns. Stamp duty, meanwhile, has long
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been described as discouraging
1:05
geographic mobility and making it more
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difficult for prospective first-time
1:08
buyers to move into home ownership by
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adding to the upfront cost of purchasing
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their first property. The Treasury told
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city that plan A is still very much
1:16
going for growth. and they said, "We are
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committed to keeping taxes for working
1:20
people as low as possible, but growth is
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sluggish and inflation is creeping up.
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It's up to 3.8% this week, the highest
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it's been for more than a year and a
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half. And property taxes can have major
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impacts on the property market. The end
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of the stamp duty holiday for first-time
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buyers led to a significant slowdown in
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sales earlier in the year after buyers
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rushed to secure houses to avoid paying
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thousands in extra tax. And any reform
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of the tax system would be at best
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politically challenging. You can see
1:47
this from the strong reaction to the
1:48
rumors of changes over the last few
1:50
days. Making this kind of change at
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speed to plug an urgent hole in public
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finances is fraugh with risk. For
1:56
everything you need to know about the
1:57
government's tax plans, stick with
