Homeburyers pay A?6.5bn in stamp duty

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The high level of stamp-duty paid by homebuyers may be contribution to the property slowdown.

The tax has raised A?31.5 billion over the past ten years but last year’s contribution to the Treasury topped A?6.5 billion, a 675% increase on 1998.

Between 1997/98, just A?830 million in stamp duty was paid, at a time when the tax was charged at 1% on all properties sold for A?60,000 or more.

Today, the tax is levied at 1% on homes costing between A?125,000 and A?250,000; 3% on homes with a value of A?250,001 to A?500,000 and 4% on homes costing A?500,001 or more.

Taking the middle range, someone purchasing a A?250,001 house pays a tax bill of A?7,500.

In London, the average asking price for a home is A?402,000, generating stamp duty in excess of A?12,000.

The tax is widely regarded as inequitable and Grant Thornton, the accountant, has pointed out the Government’s efforts to help first-time buyers by increasing the lower threshold from A?60,000 to A?125,000 is ineffective. The average UK house price stands of nearly A?200,000, well above the upper limit.

Karen Campbell, head of stamp taxes at Grant Thornton, says: “Stamp duty is impeding millions of potential home owners from jumping on the property ladder” because the majority of first-time buyers are now forced to pay the tax.


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