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Home buyers pay £5.5bn in stamp duty

Thursday, 3 November 2005 12:00 AM

Home buyers paid £5.5 billion to the Treasury in stamp duty in the last financial year.

This is a rise of almost 50 per cent on the year before, figures from HM Revenue and Customs show.

Almost half of this money came from home buyers in London and the south-east where more properties come under the higher stamp duty thresholds.

The figures cover the period before chancellor Gordon Brown took action to reduce the impact of stamp duty by raising minimum thresholds.

At the start of the current financial year, he doubled the lower threshold on which stamp duty is paid to £120,000.

Buyers of homes worth more than £120,000 pay one per cent of the purchase price to the Treasury in stamp duty land tax, although this threshold rises to£150,000 in disadvantaged areas.

For homes worth more than £250,000 stamp duty trebles to three per cent, while purchasers of homes worth over £500,000 pay four per cent.

Conservative local government spokesman Caroline Spelman accused the government of using stamp duty as a "stealth tax".

"It is clearly being used to enrich the Treasury at the expense of home owners," she said.

"What they have failed to do is adjust the stamp duty threshold to reflect the huge increase in house prices."

And the deputy director of the Council of Mortgage Lenders, Peter Williams, said: "Rising house prices have provided a windfall for the Treasury.

"The cost of stamp duty is felt most acutely by first-time buyers. It is in direct conflict with the government's stated aim of expanding home-ownership."

The Treasury says the rise is caused by the sharp increases in house prices since the government came to power in 1997.

Then the Treasury's income from stamp duty was £675 million, with an average house price of £76,000.

Official figures now put the average house price at £186,208.

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