The old “slab” structure, in which a property purchase a penny above a threshold could throw a buyer into a higher tax rate charged on the entire purchase price, was overdue reform. From this morning, it turns “progressive”, and works like the income tax system, in percentage tiers. Zero is payable up to £125,000, the portion to £250,000 is charged at 2%, then 5% on the portion to £925,000, 10% to £1.5m and 12% top rate on anything above that. While Treasury receipts are likely to suffer as a result of the reform, the burden will shift further to the top of the market, with everyone spending up to around £1m profiting, and buyers spending more paying more tax. Buyers who’ve exchanged on a date up to December 3 but not completed on December 4 or later will be able to choose which tax system they’d prefer.
Presumably, what we’re seeing here is the Tories’ response to Labour’s mansion tax proposals… something that take into the next election that shows the party’s serious about taxing the wealthiest homeowners.
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