Homebuyers to pay more in stamp duty as property prices rise…

August 29th 2013
By: Melanie Hollidge
Homebuyers to pay more in stamp duty as property prices rise…

News that property prices are on the increase has been good news for homeowners, however with this increase in property also means that home-buyers could have to face paying £7,500 or more by 2018 for a house purchase.
This new data has come from a report by the TaxPayers’ Alliance who is campaigning for reforms to be made to stamp duty. It also states that four out of five homes sold across England and Wales will be subject to the land tax within five years. In 2018 they anticipate that 40% of homes sold will be subject to 3% or more, resulting in home-buyers having to find £7,500 or more to pay in stamp duty.
At the moment a quarter of all house sales in England and Wales are subject to the higher 3% stamp duty, this higher rate was originally intended for the most expensive properties. In London the TaxPayers’ Alliance have stated that 99% of homes in London will be liable for stamp duty in five years time.
East Midlands is expected to see the fastest increase in the number of houses liable for stamp duty.
Homes are currently free of stamp duty up to the value of £125,00 and a home that is worth up to £250,000 will have to pay 1% tax. A home worth over £250,00 to £500,00 will have to pay 3% and over £500,000 4% and then 5% on those over £1 million to £2 million and 7% beyond that point.
With the price of the average house expected to increase over the next few years, the government really needs to rethink these property bands for stamp duty.