20 things

Top 20 Stamp Duty facts

25 March 2006

• Research conducted by Halifax has revealed the average homebuyer in London now pays £7,714 in stamp duty taxes, compared to £1,535 five years ago. The research showed average residential property price in London is £257,120, above the 3 per cent stamp duty threshold.
• The stamp duty tax brackets currently stand at 0 per cent for any property less than £120,000. Properties between £120,000 to £250,000 are subject to a 1 per cent tax. Properties between £250,000 to £500,000 have to pay a 3 per cent stamp duty tax, with properties above £500,000 eligible to pay 4 per cent of the property price.
• Halifax research showed the North West, West Midlands, East of England, South East, South West and London all have average prices of a detached house above the 3 per cent threshold.
• Halifax research into stamp duty threshold revealed the UK residential stamp duty tax has trebled since 1999-2000, from 1.8 billion, to the 2004/05 total of £5.5 billion.
• Revenue raised at the 3 and 4 per cent rates has grown from £0.9 billion to £3.7 billion between 1999/00 to 2004/05. £1.7 billion of this was raised on properties between £250,000-£500,000, a rise of 364 per cent from 1999/00. A further £1.01 billion was raised on properties above the £500,000 price bracket, an increase of 246 per cent.
• 62 per cent of London house sales, of detached and semi-detached properties occurred above the £250,000 threshold in 2005, with the South East seeing the proportion rise from 18 per cent to 43 per cent within five years.
• All regions have seen an increase in the percentage of sales above £250,000 since 2000, with Northern Ireland showing the lowest proportion of sales, at 4 per cent.
• The North East saw an 8 per cent increase in the percentage of sales above the 3 per cent threshold, with Wales reporting a 10 per cent increase since 2000.
• Two-thirds of the extra stamp duty revenue raised since 2000 has been raised in Southern England. London and the South East collectively accounted for 40 per cent of the total.
• The ‘tax burden’ has become more evenly spread since 2000 with 66 per cent of the total attributed to southern England, in 2004/05, compared with 73 per cent in 1999/00.
• London is the only region where the average price of terraced houses and semi-detached houses, £295,502 and £334,510 respectively, are above the 3 per cent stamp duty threshold.
• Tim Crawford, group economist at the Halifax, commented: “The higher stamp duty thresholds have not changed in more than eight years, even though property prices have increased by 150 per cent over this period. More and more properties are falling into the 3 per cent and 4 per cent nets.”
• Alliance & Leicester (A&L) research has similarly revealed people are hindered by stamp duty tax and called for it to be abolished for first-time buyers (FTBs). Its research revealed 61 per cent of FTBs expect to spend above £120,00 on their first property, above the stamp duty threshold.
• Stephen Leonard, director of mortgages at A&L, said: “It’s likely a large number of FTBs would like to get on the property ladder sooner but are prevented from doing so. The additional tax is making entry into the housing market even harder.”
• In London, only 8 per cent of FTBs are looking to buy a home under £120,000, with 66 per cent looking to pay between £146,000 and £250,000 for their first property.
• Similar Bradford & Bingley research suggested 70 per cent of FTBs in London are being caught by stamp duty tax.
• Both Bradford & Bingley and A&L research utilised YouGov for its independent surveys.
• The house price data used by Halifax to conduct its stamp duty survey is sourced from the Halifax House Price Index.
• The current stamp duty bands have been in place since July 1997. The bands have not been increased since then but the percentage payable has increased, from 1.5 per cent for properties between £250,000 and £500,000 to 3 per cent currently.
• The revenue raised by the government through residential stamp duty was £5.5 billion in 2004/05, 713 per cent higher than the £675 million raised in 1996/97.