Homeburyers pay £6.5bn in stamp duty
The high level of stamp-duty paid by homebuyers may be contribution to the property slowdown.
The tax has raised £31.5 billion over the past ten years but last year’s contribution to the Treasury topped £6.5 billion, a 675% increase on 1998.
Between 1997/98, just £830 million in stamp duty was paid, at a time when the tax was charged at 1% on all properties sold for £60,000 or more.
Today, the tax is levied at 1% on homes costing between £125,000 and £250,000; 3% on homes with a value of £250,001 to £500,000 and 4% on homes costing £500,001 or more.
Taking the middle range, someone purchasing a £250,001 house pays a tax bill of £7,500.
In London, the average asking price for a home is £402,000, generating stamp duty in excess of £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 £60,000 to £125,000 is ineffective. The average UK house price stands of nearly £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.