FISCUS MORTGAGES - INFORMATION AND ADVICE

Nine-fold increase in residential Stamp Duty tax since 93/94

7-Feb-2005

The halifax reports on startling increases in the amount of stamp duty paid on property purchases

In 1797, William Pitt the Younger described stamp duty as "easily raised, pressing little on any particular class, especially the lower orders of society, and producing a revenue safely and expeditiously collected at small expense." He virtually doubled the tax that year. (Source: Inland Revenue)

Halifax research has found that the residential stamp duty tax take has increased more than nine-fold since 1993/94, from £465 million to an estimated £4,300 million in the current tax year.

A survey conducted for Halifax by NOP found that 81% of people in the UK think that the current stamp duty regime is unfair on first-time buyers (FTBs). 70% believe that the Government should adjust the stamp duty threshold to bring it in line with the increase in house prices.

Halifax research also shows that the average FTB in all of the UK's 12 regions now pays stamp duty. This contrasts with 1993 when only the average FTB in London paid stamp duty. The number of towns where the average house price paid by an FTB is above the £60,000 stamp duty threshold has risen from 13% of all towns surveyed in 1994 to 98% in 2004.

Halifax calculates that the lower stamp duty threshold of £60,000 would now be £156,900 if it had been increased in line with house price inflation since March 1993 - the last time that the threshold was increased. Halifax notes that the government itself estimates that raising the £60,000 threshold to £150,000 would cost the Exchequer £570 million, according to a response to a Parliamentary Question in mid 2004 by Ruth Kelly, then Financial Secretary at the Treasury.