With a quarter of all house sales across England and Wales attracting the higher rate of stamp duty which was originally intended for only the most expensive properties a report has concluded that the stamp duty is putting families off moving house.
Stamp duty land tax is payable on the purchase or transfer of a property or land within the UK if the value is over £125,000, with the amount to be paid starting at 1% of the purchase price and increasing with cost of the property or land.
- Under £125,000: Free of StampDutyLand Tax
- Over £125,000 – £250,000: 1% of property value
- Over £250,000 – £500,000: 3% of property value
- Over £500,000 – £1 million: 4% of property value
- Over £1 million – £2 million: 5% of property
London and the South East are the worst hit with 50% of buyers purchasing housing over £250,000 meaning paying Stamp Duty Land Tax of 3% or more, with the figure in London alone reaching two thirds of buyers.
In 1997 the 3% tax was introduced on properties which were valued at over £250,000 as a tax on the most expensive homes however with the increase in house prices especially in The South it appears that it has become a tax on the majority.
The increase in housing prices without an increase in the Stamp Duty Land Tax thresholds has led to property experts warning of a stunt in the housing market and MPs stating that it is putting off couples moving to a larger house and potentially starting a family.
The issue unfortunately is that the average house price is on the rise meaning that the majority of people are now having to pay a tax that wasn’t intended for them on very modest family homes.
Kulzinder is part one of the Commercial Law solicitors in Leicester working alongside Jason Hathaway and Daniel Martin. Kulzinder assists on corporate cases, dealing with business sale and purchase and a broad range of legal areas within the commercial department.
Keep up to date with our daily blogs through the Edward Hands & Lewis mobile app, just search Edward Hands on the iPhone or Android store to download our app for free.