The Tax Payers’ Alliance is calling for stamp duty to be abolished, claiming it amounts to double taxation which is undermining first time buyers and the housing market in general.
Buyers currently pay 1 per cent stamp duty on properties worth more than £125,000, 3 per cent above £250,000 and 4 per cent above £500,000. For homes worth more than £1m, buyers pay 5 per cent and since March 2012 they 7 per cent on properties worth £2m or more.
According to the TPA, 723,829 homes were bought in 2012/13, with 182,692 liable for stamp duty at a rate of more than 3 per cent. This raised £4bn revenue in total with £3.6bn paid at the rate 3 per cent or more.
In the South East, 48,419 homes were bought at either the 3, 5 or 7 per cent rate, accounting for 39 per cent of transactions in the area but 91 per cent of the revenue. In the North West 7,571 were bought at the higher rates, accounting for 9 per cent of sales in the region but 72 per cent of the revenue.
The Government has launched a number of schemes to try and give first time buyers and the wider housing market a boost. TPA chief executive Matthew Sinclair says if the Government is serious about encouraging people to buy homes it should abolish stamp duty.
He says: “Owning your own home is an important milestone, but for many families it seems harder and harder to reach. Ministers have done nothing to ease the burden imposed by stamp duty, which is an unfair double tax that gets in the way of would-be first time buyers and others thinking about moving. Instead they have made things worse with new thresholds and new higher rates.
“The Government needs to act on ministers’ rhetoric about getting people onto the property ladder and cut this unfair tax.”