Property taxes to hand Hammond £160bn

Hated wealth and property taxes will cost some families more than £160bn over the next five years in a major windfall for the treasury.

the Chancellor is on course to collect the sum from stamp duty, capital gains tax and inheritance tax between now and 2022 south of the Border.

that compares with the near-£100bn haul the three taxes provided over the last five years.

the expected 60pc rise in revenues f rom these property- related taxes underline just how important the housing market is as a source of income for the Government.

But it also highlights the growing burden faced by families as the treasury targets their assets.

the figures come from documents published by the Office for Budget Responsibility in March and will be updated when Philip Hammond delivers his latest Budget tomorrow.

He has promised to make housing his ‘number one priority’ in the Budget – calling for 300,000 homes to be built a year in the UK.

Having already pledged to plough another £10bn into Help to Buy to assist a further 135,000 families in purchasing a home by 2021, he is expected to tear up the planning rules to make it easier for developers to build.

and with ministers under pressure to give a helping hand to younger voters, the Chancellor is thought to be planning to cut stamp duty for first-time buyers.

Critics of the tax argue it should be abolished altogether, although this is highly unlikely given how much money it brings in.

Stamp duty revenues look set to bring in £78bn over the next five years while inheritance tax is expected to bring in almost £ 28bn and capital gains tax nearly £55bn.

Julian Jessop, chief economist at the Institute of economic affairs, said: ‘ Ideally, stamp duty should be abolished. It is a pernicious tax which clogs up the market, stopping people from moving when they want or need to, such as for a new job or to downsize. Failing that, the Government should announce a fundamental review of taxes on property, i ncluding stamp duty, capital gains tax, inheritance tax, council tax and business rates.’

Stamp duty is currently paid by families buying houses worth £150,000 or more although there is a 3pc surcharge on second homes and landlords.

Capital gains tax is the levy paid on profits made when an asset is sold. the gain in the value of the asset is taxed, not the full amount of money received.

although it does not apply to a family’s main home, it includes other assets including second homes such as holiday cottages or buy-to-lets as well as shares, jewellery and antiques.

Critics have also claimed that inheritance tax is increasingly becoming a tax on the middle classes rather than just the rich.