'Very modest' house purchases now hit with high-level stamp duty

One in four homebuyers now made to pay at least £7,500 to Treasury

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The Independent Online

More than a quarter of all homes bought in the past year had the higher rate of stamp duty imposed upon them, requiring people to pay the Treasury lump sums of at least £7,500.

The tax has been described as “punitive”, preventing people from getting on the property ladder or forcing them to decide against moving house when they would otherwise do so.

Stamp duty was introduced 15 years ago as a measure to charge only the richest homebuyers, but while house prices have inflated the percentage bands have not. While homes worth £125,000 to £250,000 are levied with a 1 per cent tax, it jumps up to 3 per cent for homes worth £250,001.

This does not account for the fact that a house worth £250,000 back in 1997 would be worth £750,000 today.

Research released today has shown that more than 180,000 people were made to pay stamp duty at a rate of 3 per cent or more in 2012-13, out of a total of 723,000 properties changing hands.

And that jump in rate has been described as a huge “second step” for those trying to climb the property ladder.

The new figures also showed a huge regional variation in the imposition of stamp duty, with 39 per cent of all transactions in the South East coming in the 3 per cent band or higher, compared to just 6 per cent of house sales in the North East, leading some estate agents to call it a “tax on the south”.

Matthew Sinclair, Chief Executive of the TaxPayers' Alliance, told the Telegraph: “Stamp duty at 3 per cent was introduced 15 years ago as a tax on the most expensive homes.

“But an increasing number of ordinary families in ordinary circumstances are finding that they too have to pay this astonishingly high tax rate, particularly in the south of England where rising property prices have made this a tax on even very modest family homes.

“The Government needs to act on ministers' rhetoric about getting people onto the property ladder and cut this unfair tax.”

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