British Chancellor Alistair Darling turned the screw on the better off today as he gave a helping hand to first-time buyers in the UK.
In his last Budget before the General Election he announced that the threshold for stamp duty on home buying would double from £125,000 to £250,000 from midnight tonight.
But to cheers from Labour MPs he also announced that the move would be funded through an increase in stamp duty to 5% for residential property over £1 million from April next year.
There was further bad news for higher earners – already facing a 50% tax rate on earnings over £150,000 – when Mr Darling announced the end of some personal allowances.
He said that for people with incomes over £100,000 a year – the top 2% – the value of their personal allowances would gradually be removed.
He also said tax relief on pensions will be restricted from next year, but again only for those with incomes above £130,000 a year.
Justifying the moves, he told MPs: “Looking across all the tax rises since the beginning of this global crisis, 60% of them will be paid for by the top 5% of earners.
“We have not raised these taxes out of dogma or ideology. We are determined to ensure our overall tax regime remains competitive.
“But I believe those who have benefited the most from the strong growth in incomes in past years should now pay their fair share of tax.”
There was limited good news for motorists already facing soaring fuel costs.
Mr Darling said he would stagger next month’s scheduled 3p per litre increase in fuel duties – with the tax rising by a just a penny in April with another penny in October and the final instalment in January next year.
There were no shocks in general for drinkers and smokers.
Duty on beer, wine and spirits will increase as planned from midnight on Sunday. Alcohol duties will also increase by 2% above inflation for two further years from 2013.
Tobacco duty will increase from today by 1 per cent above inflation and then increase by 2 per cent in real terms each year until 2014.
But for cider drinkers Mr Darling announced a 10% duty rise above inflation from midnight on Sunday.
And he said that in September changes will be made to the definition of cider to ensure specific strong ciders are taxed more appropriately.
Mr Darling said that stronger than expected tax receipts meant that Government borrowing would be £167 billion this year – £11 billion down on the £178 billion he predicted in the Pre-Budget Report (PBR) in December.
He said that the debt would continue to fall faster than previously forecast - dropping to £74 billion in 2014-15, down £8 billion on his earlier prediction.
The Chancellor said that he was standing by his forecast that the economy would grow by 1 to 1.5% this year although he slightly downgraded his prediction for next year to 3 to 3.5% compared to the 3.5% in the PBR.