Stamp duty is “big financial barrier”
March 23, 2007 by admin
Filed under News, News-Mortgages
The tax man is expected to reap the rewards of Gordon Brown’s final Budget with an additional £1.4 billion expected to enter his coffers as a result of stamp duty alone.
It comes as the Chancellor failed to raise stamp duty thresholds despite the average house price soaring in recent years.
The higher thresholds have been in place since 1997 yet in that time the average house price has rocketed by 175 per cent.
It means that more and more people are now expected to pay the tax, with first-time buyers being hit hardest as they struggle to get a mortgage and take their first steps onto the property ladder.
Homebuyers are required to pay one per cent stamp duty on a property which costs up to £125,000, three per cent for a £250,000 property and four per cent for one valued at £500,000.
The problem is that an estimated 3.5 million homes in England and Wales are now valued at more than £250,000.
“Stamp duty should be indexed in line with house prices and inflation,” said the Council of Mortgage Lenders’ Christopher Dean. “It is a big financial barrier.”
The Treasury has admitted that two fifths of homebuyers in the country will now be required to pay stamp duty.
