Call to Stamp Out Stamp Duty

Alex Johnson

c11737bdbfac8859601b859b2e659ea1c9c50926 300x214 Call to Stamp Out Stamp DutyMore than a quarter of homebuyers in England and Wales are now paying stamp duty at the higher rates of 3% or more and facing bills of over £7,500, according to a new study from the TaxPayers’ Alliance which is calling for it to be cut.

At the moment, sales of residential properties are free of stamp duty up to the value of £125,000 but attract a 1% tax between £125,000 and £250,000. As house prices have risen, more people are consequently paying at the higher rates of 3% applied to homes worth between £250,000 and £500,000 (as well as 4% on those valued at up to £1 million, 5% in the £1-£2 million bracket and 7% for £2 million+).

The TPA argues the 3% level is a very real barrier for an increasing number of first-time buyers as well as existing home-owners.

Some 723,829 homes were bought in 2012/13, with more than 25% (182,692) being liable for stamp duty at a rate of 3% or more.

Stamp duty rates of 3% or more were imposed on 65% of all residential transactions in London, 39% in the rest of the South-East, 27% in the East of England, 24% in the South-West, 12% in the West Midlands, 10% in the East Midlands, 9% in the North-West, Yorkshire and the Humber, 8% in Wales and 6% in the North-East, according to the TPA research.

TPA chief executive Matthew Sinclair said: “Owning your own home is an important milestone, but for many families it seems harder and harder to reach. Ministers have done nothing to ease the burden imposed by stamp duty, which is an unfair double tax that gets in the way of would-be first-time buyers and others thinking about moving. Instead they have made things worse with new thresholds and new, higher rates. The Government needs to act on ministers’ rhetoric about getting people onto the property ladder and cut this unfair tax.”

Mortgage roundup
* Chelsea Building Society is now offering rates at 85% loan to valute (LTV) from 3.24%. For those with larger deposits or more equity in an existing property, it has also introduced a new 65% LTV, two-year mortgage at 1.84%. It carries a £745 product fee but offers £500 cashback for purchasers or free valuation and legal assistance for remortgage customers.

* Skipton Building Society has launched a new range of mortgage products featuring lower rates and free valuations for house purchase customers on selected deals including 2 Year Fix to 60% LTV at 1.99% (was 2.08%, down 0.09%, application fee: £195, completion fee: £800. It has also extended the availability of their 2-year fix to 90% LTV at 3.99%, with £160 cashback, until 30 September 2015.

* Halifax has announced various rate reductions across its product range for homemovers, first time buyers and remortgage customers. Selected rates have been reduced by up to 0.20% on a number of fixed rate and tracker mortgages. Rates on mortgages in the affordable housing range have been reduced by 0.40%. In addition, Halifax has launched a new offer, paying £500 towards a chosen media package for all homebuyers which could include broadband and digital TV.

Your chance – again – to live in a gatehouse
There was so much interest in the gatehouse this blog featured the other day that it seems only fair to include another one. Pictured above is the 3 bedroom, Grade II listed Pickards Lodge gate house (in need, as they say of “updating and modernisation”) which dates back to the middle of the 19th century. It is built of Cotswold stone with a stone slate roof and a two-storey tower. It’s at Westonbirt, Tetbury, Gloucestershire, and is on with Knight Frank for £500,000.

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  • Simon Delancey

    I’m sure they’ll find some suitable Peter to rob to pay Paul :(

  • fabcat

    If you abolish stamp duty the house prices will rise accordingly and the buyers will be no better off. The lenders will lend more and the internediaries pull more commission. Meanwhile the Treasury loses the tax to pay for the things that power the economy, for the NHS and for Defence and all the rest. You’d have to be mad to think that was a good idea.

  • Jed Bland

    “The TPA argues the 3% level is a very real barrier for an increasing number of first-time buyers as well as existing home-owners.”

    First time buyers paying £250,000? Surely not.

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