First time buyers stung by stamp duty

A report published today by the Halifax shows that the average stamp duty paid by first time buyers has doubled in the past five years to £1,751.

 

In the South one fifth of first time buyers are now eligible to pay the tax as opposed to only 1-in-50 in 2002. This raises the average property price by £7,500.

 

In London, where property inflation has been most pronounced, the average bill has risen to £8,675.

Martin Ellis, Chief Economist at Halifax, commented:

"Stamp duty has again become an issue for first time buyers because the stamp duty thresholds have not kept pace with house price inflation. First-time buyers in the south are most likely to pay but so too are a growing percentage in the north. In London the average first time buyer is now liable to pay a stamp duty bill of more than £8,000.”

 

If the lowest stamp duty threshold had been increased in line with house price inflation since March 1993, it would now stand at £191,000.  This would be £66,000 above its current level of £125,000.

 

Martin Ellis, added:

 

“The government has raised the 1% threshold in recent years; unfortunately, more needs to be done. We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade and to commit to index the thresholds for house price inflation in the future."

 

The government’s revenue from stamp duty is estimated to be in the region of £7 billion a year.

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