Stamp duty takes its toll on first time buyers
March 11, 2008 by admin
Filed under News, News-Mortgages
Rocketing house prices mean that hardly any properties in the south of England are selling for less than the stamp duty threshold. 
A new survey from Halifax found that in 2007, the average first-time buyer paid stamp duty in 99 per cent of local authorities in the south-east, south-west, London and East Anglia.
That figure was just 42 per cent in the rest of England and Wales.
A buyer becomes liable for stamp duty at a rate of one per cent of the sale price – payable on top of all the other costs – when the property bought costs more than £125,000.
And not only are the numbers having to pay stamp duty rising, but the sums actually paid are much higher than in the past too.
The average first-time buyer paid £1,751 in 2007, compared to just £960 in 2002.
Moreover, in 19 per cent of local authorities in the south, 19 per cent of first-time buyers were actually having to pay the higher rate of stamp duty – three per cent, which applies to purchases worth over £250,000.
Halifax’s chief economist Martin Ellis warned that the stamp duty system is making buying a home less and less affordable.
He said: “We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade and to commit to index the thresholds for house price inflation in the future.”
