Brown 'set to lift stamp duty to 5%'

HOME buyers beware. The top rate of stamp duty on house buying could be hiked from 4% to 5%, warn accountants Arthur Andersen. They think the change is 'pretty likely' in Gordon Brown's 27 November pre-Budget report.

The top rate hits only houses above £500,000. To raise much money from the housing sector, the Chancellor would also need to increase rates on less costly properties. Brown has raised stamp duty repeatedly since 1997.

'His sums don't add up and stamp duty is a very easy source of revenue,' said Andersen tax partner Patrick Cannon.

He warned that a 5% rate could hit commercial property firms hard. Moves to attack tax relief on companies' internal sales of property could also have a big impact.

Overall, Andersen said: 'The UK's financial position will come under increasing strain. There can only be two possible medium-term outcomes - increased taxation or reduced spending growth.'