[LONDON] British finance minister George Osborne said on Wednesday that he would introduce sweeping cuts to stamp duty for nearly all property purchases, addressing a long-standing grievance of homebuyers five months before an election.
He said the current system, where the amount owed jumps at various threshold levels, would be replaced from Thursday by a graduated rate, similar to income tax.
Stamp duty is currently paid on the total value of a home or land over 125,000 pounds at a rate that increases in stages as it rises through the band thresholds in line with the value of the property.
Osborne told parliament that each rate will now only apply to the part of the property price that falls within that band and that the rates of tax would change, benefiting 98 per cent of homebuyers.
The tax will start at 2 per cent on the portion of a property from 125,000 pounds to 250,000 pounds, 5 per cent up to 925,000 pounds, 10 per cent up to 1.5 million and 12 per cent above that level.
"Ninety-eight per cent (of people) pay less and the whole reform represents a tax cut of 800 million pounds per year," Mr Osborne said in his half-yearly budget.
House prices have risen by nearly 10 per cent nationally in the past year, and twice that in London, making housing a key battleground in the election due next May and pushing increasing numbers of people into paying higher rates of tax.