- Critics have accused the Government of being ‘addicted’ to revenue from stamp duty
- Ministers have failed to update bands for the fee, which range from 1% for homes costing up to £250,000 to 7% for those £2million-plus
- Amount paid in stamp duty is now almost at level last seen at height of property boom in 2007
Stamp duty receipts have rocketed £1.5billion in just one year as the Treasury cashed in on soaring house prices.
Homebuyers paid £6.4billion in the levy in the last tax year, up almost a third from £4.9billion in 2012-13.
Critics have accused the Government of being ‘addicted’ to revenue from stamp duty, which is paid on house purchases over £125,000.
Critics have accused the Government of being ‘addicted’ to revenue from stamp duty, which is paid on house purchases over £125,000 (File photo)
Ministers have failed to update bands for the fee, which range from 1 per cent for homes costing up to £250,000 to 7 per cent for those of £2million-plus.
This means thousands more first-time buyers have been dragged into the net as house prices have risen by double figures across many regions.
Official data shows an extra £700million was raked in for 2013-14 compared with the previous year from buyers of homes under £500,000. The amount paid in stamp duty is now almost at the level last seen at the height of the property boom in 2007.
Paula Higgins, chief executive of the HomeOwners’ Alliance, said: ‘It is an astonishing rise which will anger homeowners.
‘Stamp duty used to be a tax on wealthier homeowners but it is now trapping first-time buyers.’ She said the ‘sneaky tax’ was one of the biggest barriers to getting on the property ladder.
The Office for National Statistics says the average UK house price is £272,000 after taking figures from all lenders
Lucian Cook, a director at Savills estate agents, said failing to update the bands for stamp duty raises barriers to home ownership in London and the South East as well as making it ‘more difficult to move up the ladder across wider swathes of the country in the longer term’.
He added that higher rates for costlier homes give ‘the Treasury a windfall of receipts that further blurs the lines between stamp duty being a tool to control the housing market and being a revenue raiser’.
The Office for National Statistics says the average UK house price is £272,000 after taking figures from all lenders. This puts swathes of middle-class families in the 3 per cent bracket, facing stamp duty of at least £7,500.
The average London home now costs £514,000, meaning a stamp duty levy of 4 per cent and a bill of at least £20,000.
More than £1billion was collected from sales of homes worth more than £2million in 2013-14, up 26 per cent on the previous year.
Mr Cook said this vast sum cast doubt on the need for Labour’s proposed mansion tax.
A Treasury spokesman said all taxes were kept under review but the priority was still cutting the deficit. ‘Stamp duty raises several billion pounds each year, which helps pay for essential services,’ she added.