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Public want reform of stamp duty

The Government is set to reap around 4.3bn stamp duty from house sales in the current tax year – a nine-fold increase since 1993/94 – according to the Halifax.

A survey by the lender finds that 81 per cent of people think stamp duty is unfair on first-time buyers. Most respondents say the threshold should increase in line with the rate of house price increases.

In 1993, when the threshold was set at 60,000, just 13 per cent of first homes attracted stamp duty compared with 98 per cent today.

Stamp duty is now paid by first-time buyers in all of the UK’s 12 regions while, in 1993, only average first-time buyers in London were hit.

The Treasury estimates that raising the threshold from 60,000 to 150,000 – still lower than the price of an average home – would lose 570m in duty a year.

The rate of stamp duty is 1 per cent for homes bought for between 60,000 and 250,000, rising to 3 per cent up to 500,000 and 4 per cent above 500,000.

The average house price is now above 250,000 in 16 per cent of UK towns compared with no towns in 1993.

Belgravia Insurance consultant Paul White says: “Although, compared with our European partners, stamp duty is relatively cheap, I still feel that the 3 per cent limit is too low.

“Anyone trading up will be caught up by this, which seems unfair.”

AM Ruthven & Associates director Alex Ruthven says: “Effectively, people will not be inclined to price their house at 260,000 as they will be less likely to sell it.

“They would rather put their house up for 249,950. This could create something of a false ceiling on property prices.”

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