One in five now paying 3% stamp duty

Monday, 05 March 2007 12:00

One property sale in five is now taxed at three per cent stamp duty, Halifax reveals.

The bank looked at house prices across England and Wales' post code areas and found there has been a 281 per cent increase in the number of people paying three per cent or more in stamp duty - adding at least £7,500 to the cost of buying a home.

Stamp duty is charged at one per cent on all homes worth more than £125,000. This triples to three per cent for all properties sold for more than £250,000 and then rises again to four per cent for homes sold for more than £500,000.

And while the lower threshold has risen from £60,000 to £125,000 in recent years, there has been no increase in the higher thresholds since 1997, seeing more and more people become liable for the higher tax bands.

Halifax calculates 3.5 million properties in England and Wales - or one home in five - are now worth more than £250,000, with 600,000 worth more than £500,000.

And this is a tax of the south, with 64 per cent of homes valued above £250,000 and 77 per cent of properties worth more than £500,000 either in London or the south-east.

By contrast, people buying homes in Manchester, Hull, and around Bridgend are the least likely to pay stamp duty, with 98 per cent of properties or more in the M38, HU3, and CF41,CF42, and CF43 post codes worth less than £125,000.

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