Link stamp duty to average house prices, says Halifax
Halifax is calling for stamp duty thresholds to be linked to the price of the average property
Monday, 28, Feb 2005 12:41
Stamp duty land tax will hit first-time buyers in all but two per cent of the UK's electoral constituencies, Halifax has revealed.
According to Halifax, just ten years ago just 13 per cent of constituencies had property prices high enough whereby first-time buyers had to pay the tax.
With both the Budget and a general election approaching, Halifax revealed this has now increased to 98 per cent.
As such, the mortgage lender is calling for the stamp duty thresholds to be linked to the average cost of a property in the UK, to prevent more and more people being hit by this tax.
Stamp duty is paid on properties worth more than £60,000 at a rate of one per cent.
It trebles on houses costing more than £250,000 and purchasers pay four per cent on properties worth more than £500,000.
Without exception all properties worth more than £150,000 incur stamp duty when sold.
Earlier in the year Alliance & Leicester revealed that one in four first-time buyers is finding stamp duty a "major obstacle" to buying.
"The lowest threshold for paying stamp duty has remained the same since 1993 even though house prices have risen by 160 per cent during this period. That is why we are sending a pamphlet about the need for stamp duty reform to about 800 key policy makers, including all MPs," said Martin Ellis, chief economist at the Halifax.
Vince Cable, Liberal Democrat Treasury spokesman, said his party would raise the bottom threshold for the tax to £150,000 - thereby relieving over 400,000 home-buyers from paying the tax.
"First-time buyers are being squeezed out of the housing market not only by higher house prices but also by being swept into the stamp duty net," said Dr Cable.
"By failing to uprate the stamp duty threshold Gordon Brown has hit first-time buyers and those on low incomes the hardest."
On Thursday building society chiefs are set to present a petition against stamp duty to the Chancellor Gordon Brown, ahead of his Budget announcement on March 16.
Over twenty thousand people have signed the petition as part of the West Bromwich Building Society's Raise the Roof campaign, which was launched in May 2004.
"With the election pending, we want to ensure the Government listens to the groundswell of opinion, which the campaign represents," said Andrew Messenger, chief executive of the West Bromwich Building Society.