A tax raid on luxury homes risks driving up property prices and holding back middle-class families on the housing ladder, a major British housebuilder has warned.
Jenny Daly, chief executive of Taylor Wimpey, said: tax attack by Rachel ReevesThe Chancellor is distorting the property market and driving down prices for families looking to expand their space in his Budget next week.
The warning came after new data on Monday showed that Budget speculation A potential tax raid and rumors of a stamp duty change have hit sales of the UK's most expensive homes.
Sales of agreed homes priced over £2m fell 12% year on year.
Concerns have grown that Ms Reeves will focus on luxury homes in her November 26 budget as part of an attempt to plug a multi-billion-dollar hole in the government's finances, but Ms Daly said the complication would cool the market.
“It would certainly have a negative impact, even if it only affected a certain part of the market,” Ms Daly said. “To increase demand, you need to weaken the housing market, not add uncertainty or increased costs.
“We need to remember that housing plays a really important role in economic and social mobility, so building that capacity [policies] can be quite distorting.”
Ms Daley, who is understood to have attended a business event hosted by Sir Keir Starmer, the Prime Minister, in Downing Street last week, said the increase stamp duty paid can also lead to a “cliff edge” for families looking to sell. Because they tend to avoid pricing houses at or near the stamp duty level, prices move beyond that level and start at a higher point, she said.
Ms Reeves is expected to change Britain's property tax system next week. focus on more expensive houses. This may include a council tax surcharge paid on homes in the three highest property value bands.
This £600 million surcharge will be levied on hundreds of thousands of luxury homes, which will mainly hit families living in London and the south east.
People may be allowed to defer paying the new tax until they move or after they die – but this means some families will have to pay another layer of inheritance tax when their loved ones die, on top of the existing 40 percent death tax.
Lucian Cook, of estate agency Savills, said: “The increase in voting will affect a wider section of the electorate than perhaps anticipated.
“If there is a revaluation, liabilities will become even more focused on London and the South East, particularly London because that is where house price growth has been highest.”
The industry warnings come as Rightmove data showed agreed sales of homes priced between £500,000 and £2m were down 8%.
