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