Rising house prices mean more income from stamp duty

Rising house prices mean more income from stamp duty

With more home buyers in the UK paying more for their houses, the percentage of buyers having to pay a 3 percent stamp duty has gone up from 6 percent in 2001to 19 percent in 2006. The new data comes from a report released by Halifax bank, part of the HBOS Group (LSE: HBOS).

Almost two-thirds of the homes that sell for enough to become liable for the 3 percent tax are in London and South East England, and almost all the homes in some boroughs of London are liable. Close to a quarter of postcode districts in England and Wales now have average house prices above the 3 percent threshold. The number of postcode districts with average prices in that range was just one in 20 five years ago.

The stamp duty on land transactions, in force since 1 December 2003, requires a 3 percent payment on all properties costing between £250,000 and £500,000. Around £4.6 billion in stamp duties were collected in the 2005/2006 tax year, 114 percent higher than collections in 2000/2001.

The Halifax asked the chancellor to adjust stamp duty thresholds in response to increases in house prices, but Treasury responded that five out of six of those buying a home pay either no stamp tax at all or just at the 1 percent rate assessed on properties selling for between £125,000 and £250,000.

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