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Budget 2014: Treasury eyes 2% stamp duty band on £250K homes

Chancellor George Osborne is considering a new stamp duty band of 2 per cent on homes worth between £250,000 and £300,000.

The FT reports Osborne is concerned about the sharp jump from 1 per cent to 3 per cent at £250,000 is leading to many homes being under-priced.

The latest Nationwide house price index puts the average price of a UK home at £177,846.

Buyers currently pay 1 per cent stamp duty on properties worth more than £125,000, 3 per cent above £250,000 and 4 per cent above £500,000. For homes worth more than £1m, buyers pay 5 per cent and since March 2012 they pay 7 per cent on properties worth £2m or more.

The Forty Group of Conservative MPs have called for sellers to pay stamp duty while the Free Enterprise Group, another set of Tory backbenchers, is calling for stamp duty to be scrapped on homes worth less than £500,000.

Osborne is also poised to increase the income tax personal allowance to at least £10,500, or potentially up to £11,000. It is expected any increase will be funded by cuts to departmental spending and a fresh crackdown on tax avoidance.

He will also force a parliamentary vote on a new welfare spending cap and pledge to go even further in the next Conservative manifesto.

The BBC reports the statement will include extra cash for flood defences, a cut to bingo duty and the Treasury will force banks to refer businesses to other lenders if they are turned down for a loan.

Stamp Duty graph2
Source: Zoopla


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