Stamp duty revenues hit record
Homebuyers contributed a record 6.4bn in stamp duty to government coffers last year, according to figures from Halifax.
Revenues from this tax were 40% more than in 2005-2006, as soaring property prices have seen the number of buyers paying it rise dramatically.
About 5.1bn came from tax on homes worth more than 250,000, more than triple the 1.6bn paid five years ago, as rising house prices pushed more homes into the higher bands.
Unsurprisingly, the majority of stamp duty is paid on property sales in London, the south-east and the east, where house prices are higher, accounting for 73% of the annual revenue. Londoners alone paid 1.7bn in the tax last year.
Buyers pay stamp duty at 1% of the sale price on properties worth between 125,000 and 250,000, rising to 3% on those worth between 250,000 and 500,000, with 4% charged on homes over this sum.
One in four properties in the UK is now valued at more than 250,000, said Halifax, the threshold at which the 3% rate starts, and around 4% of homes are worth more than 500,000.
But if stamp duty thresholds had increased at the same rate as property prices, homes would have to be worth almost 1.46m before buyers paid stamp duty at the highest rate. The 3% band would apply to homes worth 739,000 or more.
Martin Ellis, chief economist at Halifax, said: “The revenue generated from stamp duty on property purchases has soared as governments of both political parties have failed to link thresholds to house price inflation.
“We call on the government to raise all the stamp duty thresholds to reflect the increase in house prices over the past decade and to commit to doing so in the future.”
A spokesman for the Treasury said the 1% band was increased from 60,000 to 120,000 in March 2005, and then raised again by a further 5,000 in March last year.
