Mr Chancellor Turns Down the Proposal of Stamp Duty Reforms

stampl duty

The new chancellor denies his plans for passing taxes on sellers instead of buyers

Stamp duty – a purchase tax paid in England and Northern Ireland on properties worth more than £125,000 – was abolished in 2017 for first-time buyers spending up to £300,000 on a house

Sajid Javid has previously said he was considering proposals to make house sellers pay stamp duty instead of buyers. The change is designed to help people get on to the property ladder and buy bigger homes for their families. However, the former banker indicated, it was one of several options he is looking at ahead of his first budget later this year.

Sajid Javid Interview with The Times

In an interview with The Times, Sajid Javid said he was looking to create a more efficient tax system and did not deny he was considering major reforms to stamp duty. “I’m looking at various options. I’m a low-tax guy. I want to see simpler taxes,” Mr Javid told The Times. But after 2 days, he appeared to back track. The chancellor tweeted “To be clear, I never said to The Times I was planning to put it on sellers, and I wouldn’t support that. I know from the Ministry of Housing, Communities and Local Government that we need bold measures on housing — but this isn’t one of them.”

Buyers pay stamp duty on properties worth more than £125,000. whereas, the government had abolished it for first-time buyers on properties up to £300,000 in 2017.

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Taxes for Higher Earners

Asked about taxes for higher earners, he said: “Wait and see for the Budget.” It is interesting to note that during the Tory leadership campaign, Prime Minister Boris Johnson pledged a major tax cut for three million higher earners which would cost £9.6bn a year. However, he appeared to back away from the contentious plans to increase the 40 per cent rate to £80,000 after coming under pressure from rival Jeremy Hunt during a TV debate.

Mr Javid, who also proposed tax cuts during his campaign, said: “It wouldn’t be any surprise that I think taxes should be efficient. We want to set them at a rate where we are trying to maximize revenue, and that doesn’t always mean that you have the highest tax rate possible. Generally, I want to see lower taxes, but at a level that is going to pay for the public services.”

Budget Plans 

The chancellor said he was still deciding whether or not to announce his budget plans before the Brexit deadline of 31 October.

“I’m weighing up the options. But when we have the budget, I will be thinking about whether we need to make any changes to the fiscal rules,” he said.

Mr Javid claimed that the Treasury was “100 per cent” behind Mr Johnson’s approach to Brexit.

“We want a deal, but to get a deal, the backstop’s got to go,” he said. ”That’s what we want, that’s what we will do everything that we can to support. But if we don’t get that, we can’t get a deal through our parliament, and we will leave with no-deal.”

 

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