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Stamp Duty Revenue Increasing

A report from the Halifax bank has said that almost one fifth of homebuyers now have to pay stamp duty at a rate higher than the standard zero or 1%. This is due to rising property prices, particularly in London and the South East.

If you buy property for between £250,000 and £500,000 then you will have to pay stamp duty of 3%. In 2001 6% of homebuyers paid this, but by 2006 this figure had risen to 19%. This threshold level was introduced in 1997 and has not changed since then, whereas house prices have increased rapidly in many areas. The government revenue from stamp duty shows an increase of 114% in 5 years. A total of £4.6m was collected in the tax year 2005/2006.

According to the Halifax, the average house price is now above £250,000 in nearly a quarter of all postcodes in England and Wales. However, although the Halifax has called for stamp duty thresholds to be raised to reflect property prices, the government points out that most people still pay 1% or no stamp duty at all. The zero rate was doubled to £120,000 in 2005 and then increased to £125,000 in 2006.