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Average buyer to face £7,500 Stamp Duty bill by 2016

Written by: Your Mortgage
If average house prices keep rising at their current pace they will exceed the Stamp Duty threshold of

According to research carried out by estate agency Haart, unless there is a slowdown, average property prices will breach the £250,000 mark by the end of 2016 – the level at which Stamp Duty rises from 1% to 3%.

Many industry representatives, including the Council of Mortgage Lenders and the Royal Institution of Chartered Surveyors have called for the existing Stamp Duty structure to be reformed in a more fair way.

At present, the so-called ‘slab’ approach, where the rate of Stamp Duty charged duty leaps up at a series of thresholds, distorts the market around those thresholds.

Stamp Duty is charged at one per cent on properties between £125,000 and £250,000, three per cent up to £500,000, four per cent at £500,000-£1,000,000, five per cent at £1,000,001-£2,000,000, and seven per cent above £2,000,001.

Until 1997, stamp duty was charged at just one per cent on all homes sold for £60,000 or more.

Haart suggests that, by maintaining existing thresholds, rather than increasing them in line with rising prices, made the government made an extra £4.7billion from home buyers in 2012-13 alone.

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