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.