The Money Stop

Almost a fifth of us are being forced to pay stamp duty at higher rates because house prices are soaring.

That is according to Halifax which says that the government should act by moving the stamp duty thresholds so that they better reflect the current housing market.

The bank says that in the past five years the number of homes in England and Wales which have been sold for more than £250,000 has increased fourfold.

Halifax points out that this means 19 per cent of homebuyers are paying at least three per cent tax, a vast increase compared to the six per cent who were doing so in 2001.

“Stamp duty revenue raised from home sales continues to rise rapidly,” said Tim Crawford from Halifax.

“Bracket creep has been a key factor as a growing percentage of property sales now occur above the higher stamp duty thresholds of £250,000 and £500,000, which have not been changed since their introduction in 1997.

“Nearly a quarter of postcode districts in England and Wales now have an average price above the three per cent stamp duty threshold of £250,000, compared to only one in 20 districts five years ago,” he added.

Stamp duty is only applicable to house sales above the £125,000 threshold, with buyers paying a one per cent tax. The higher duty comes in when a property is bought for £250,000, while an even higher duty of four per cent is levied on properties above £500,000.

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