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20 things you should know about...
24 March 2007
Halifax research into Stamp Duty thresholds
1. Halifax has revealed that total stamp duty revenue from residential property sales was £4.6 billion in 2005/06.
2. This was up 114 per cent from the £2.1billion raised in 2000/01, the lender indicated.
3. According to Halifax, 89 per cent of the rise in the residential stamp duty take over the five years could be attributed to an increase in the amount raised at the higher stamp duty bands, with 3 per cent on sales between £250,000 and £500,000 and 4 per cent above £500,000.
4. The research showed that stamp duty revenue raised from sales of properties valued at more than £250,000 rose by 175 per cent.
5. This figure rose from £1.2 billion in 2000/01 to £3.4billion in 2005/06.
6. The higher stamp duty bands accounted for 74 per cent of total residential stamp duty revenue in 2005/06 compared with 58 per cent in 2000/01.
7. Halifax estimated that 3.5 million (19%) English and Welsh properties were now valued above the £250,000 stamp duty threshold, 19 per cent of the total housing stock.
8. 600,000 were valued above the £500,000 threshold, Halifax reported.
9. Regionally, London and the South East accounted for 64 per cent of homes valued above £250,000.
10. 77 per cent of homes valued above the £500,000 threshold were also from these regions.
11. The lender revealed that their had been a 175 per cent increase in the average house price since 1997, but the higher stamp duty thresholds had remained unchanged. As a result more properties were liable for Stamp Duty tax.
12. House prices have increased by 205 per cent since March 1993 (when the 1 per cent threshold was raised to £60,000) compared with a 108 per cent rise in the stamp duty threshold.
13. If the higher stamp duty thresholds had been increased in line with house price inflation since July 1997, when the £250,000 and £500,000 stamp duty thresholds were introduced, the £250,000 threshold would now stand at £680,000.
14. Halifax revealed that if the £500,000 band had also been increased with house price inflation, it would now stand at a total of £1,360,000.
15. Halifax also revealed that if the lowest stamp duty threshold, 1 per cent had been increased in line with house price inflation since March 1993, it would now stand at £185,000.
16. This was compared to its current level of £125,000.
17. Tim Crawford, Group Economist at Halifax, said: The revenue generated from property based taxes continues to increase and bracket creep has been a key factor. The thresholds at which inheritance tax and, particularly the higher stamp duty bands, are levied have lagged well behind the increase in house prices over the past decade.
18. He added: “We call on the government to raise the stamp duty and the inheritance tax thresholds in line with the increase in house prices over the past decade.”
19. The house price data in this report is sourced from the HM Land Registry and the Halifax House Price Index - the UK's longest running monthly house price series with data covering the whole country going back to January 1983.
20. House prices referred to in the report are for the years to December 2001 and 2006.
