Stamp duty bonanza prompts reform plea

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Homebuyers are paying almost £60m more in stamp duty than they were a year ago, despite concessions announced by Gordon Brown last year that the Chancellor claimed would relieve the burden of the tax.

Figures from Portman Building Society, to be published today, will reveal that since doubling the stamp duty exemption threshold, the Treasury has actually earned more from the tax.

Despite the increase in the level at which the tax becomes payable - from £60,000 to £120,000 - homebuyers paid £2.55bn in the first nine months of the current financial year, compared with £2.49bn in the previous nine months.

The stamp duty take would have risen by even more, Portman said, had it not been for a 6 per cent reduction in the number of house sales over the two periods. The average homebuyer now pays £3,459 in stamp duty, a 9 per cent increase on the typical bill prior to the change.

Matthew Wyles, at Portman, accused Mr Brown of announcing "a purely cosmetic exercise".

The Treasury has earned more from stamp duty because the extra duty generated by the rise in average house prices over the past nine months has more than compensated for the loss of income on properties that now fall below the starting threshold.

"Stamp duty is a deeply unfair tax especially for those least able to pay it - that is first-time buyers," Mr Wyles said. "The average first-time buyer property costs £26,000 more than the stamp duty threshold of £120,000."

Stamp duty is payable at 1 per cent on house purchases worth more than £120,000, rising to 3 per cent for purchases above £250,000 and 4 per cent for purchases worth £500,000 or more.