Stamp duty revenues rise 60% in five years

Research from the UK’s largest mortgage lender, Halifax, shows that the average homebuyer is now paying 60% more stamp duty than in 2002.

Over the past five years, the average liability has risen to £1,971, compared to £1,211.

As a result, homebuyers in nearly one in three UK local authorities now need to save the equivalent of over 20% of local average annual earnings to meet the bill. In 2002, the figure stood at just 5%.

Those buying a home in London and the South East are the worst affected: in the South East the average homebuyer needs to save the equivalent of 23% of average annual earnings, while in London the proportion stands at 21%.

Last year, homebuyers in South Buckinghamshire paid the most stamp duty with the average bill amounting to £21,241, or almost half the amount a local person could expect to earn in a year.

Meanwhile, in Scotland, the average stamp duty bill remained at 5% of annual local pay.

The tax is currently charged at 1% of a property’s value on homes worth between £125,000 and £250,000; 3% on homes worth between £250,001 and £500,000 and 4% for properties worth more than £500,000.

Since 2002, the number of UK properties worth over £250,000 has risen from 1.8 million, to 5.5 million in 2007.

According to Halifax, if stamp duty thresholds had been increased in line with house price inflation, the 3% rate would only apply to properties worth over £720,000.

The lender calculates that the amount raised through residential stamp duty has more than doubled since 2002, from £2.7 billion to a record £6.4 billion in 2006/2007.

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