Stamp duty revenues rise 60% in five years

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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 A?1,971, compared to A?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 A?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 A?125,000 and A?250,000; 3% on homes worth between A?250,001 and A?500,000 and 4% for properties worth more than A?500,000.

Since 2002, the number of UK properties worth over A?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 A?720,000.

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


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