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UK Politics

George Osborne mulls over higher sales taxes for multimillion pound London homes

Higher taxes on the table after last year's stamp duty rise didn't cut enthusiasm

Higher taxes on the sale of multimillion pound homes in London – many of which are bought by wealthy foreign investors – are being considered by George Osborne ahead of next month’s Autumn Statement.

The Chancellor is examining the capital’s buoyant property market – where prices continue to soar far ahead of the rest of the country – as a potential source of extra revenue.

Last year’s rise to seven per cent in stamp rate duties on the sale of houses worth more than £2m has made no difference to the booming trade in luxury properties.

Coalition ministers believe the sector could withstand the imposition of higher taxes – a move advocated by the Liberal Democrats.

One possibility is a further rise in stamp duty rates on the most expensive houses, it is understood.

Another is introducing capital gains tax on foreign buyers of the British properties, who are currently exempt from the tax.

Treasury sources stressed reports of extra tax demands on the purchasers of high-end property was speculation and no decisions had been taken by Mr Osborne.

He faces the challenge of finding more than £1bn and the move on multimillion pound properties is attractive to ministers as it would be politically uncontentious.

Mr Osborne is looking to cover the cost of two conference policy announcements by the Coalition partners at their annual conferences – the Tory promise of tax breaks for married couples and the Liberal Democrats’ commitment to free school meals for all infants school pupils. Each policy has been costed at around £600m.