Labour plans hike in stamp duty for overseas buyers

Labour plans hike in stamp duty for overseas buyers

Oct 11, 2023

Shadow Chancellor Rachel Reeves plans to increase the additional rate of stamp duty for overseas buyers, slash government consultancy costs and set up a covid corruption commission

In a wide ranging speech at the Labour party conference, Reeves outlined plans to ‘go after those that profited from the carnival of waste during the pandemic. Today the costs to the taxpayer of covid fraud is estimated at £7.2bn.

‘Labour will set up a Covid corruption commissioner supported by a hit squad of investigators equipped with the powers to take the fraudsters to court, and to get the money back from fraudsters.’

Reeves will also take action to cut expenditure on consultancy costs across government departments.

‘Labour will wage a war against fraud, waste and inefficiency – three fronts on war on waste – we will crack down on ministers use of private jets and will save millions of pounds in the process.’

‘We will slash government consultancy spend which has almost quadrupled in six years – they can play an important role but they need to offer value for money. We aim to cut consultancy spending in half over the next parliament.’

Another measure will see the rate of additional stamp duty land tax on overseas purchasers of properties raised from the current premium of 2% above the standard rates for non-UK residents. This status is determined if the buyer does not live in the UK for at least 183 days in a 12-month period before the property purchase. Reeves did not set out proposed rates but details will be finalised in the Labour manifesto before the next general election.

There are also plans to introduce a new charter for budget responsibility guaranteeing that any government putting forward economic plans will be subject to a forecast by the Office of Budget Responsibility.

Reeves added that they would ‘levy a proper windfall tax on the huge profits the energy giants are making’ and confirmed the decision to ‘abolish the non-dom tax status and put that money into the NHS instead because if you make your home in Britian you should pay your taxes here’.

In addition the ‘tax loophole that stops private schools paying VAT will be closed, and we will put that money towards helping the 93% of pupils in state schools’.

Reeves also stressed that ‘I didn’t come into politics to raise taxes on working people – Tories have put up taxes 20 times on working people’, and effectively ruled out tax rises for the majority of workers.

‘Labour will tax fairly and spend wisely –  but the lifeblood of a growing economy is business investment. We will restore investment as a share of our GDP adding an additional £50bn to our GDP every year,’ Reeves said. ‘It is the role of government to encourage and de-risk investment.’

A new national wealth fund will be set up with the target that every pound of investment put in by government will raise three times the amount from private investors.

She also confirmed that zero hour contracts will be banned, and new laws on fire and hire will be repealed while sick pay will be strengthened and employees will be given ‘basic rights from day one’ of any new employment. The national minimum wage will also be increased to ‘a genuine living wage’ reflecting real living costs.

Before going into politics, Reeves was an economist at the Bank of England.

Closing her speech, Reeves said: ‘The post of Chancellor of the Exchequer has existed now for 800 years – in that time not one single woman has held that post. Conference, when we next meet, I expect to address this hall as Britain’s first female Chancellor.

‘Labour is ready to serve, ready to lead and ready to rebuild Britain.’