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.
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.