Stamp duty 'unfair to new buyers'

The average first-time buyer pays £826 in stamp duty

Four in five people think first-time property buyers should not be made to pay stamp duty, a survey has found.

The Bank of Scotland poll found 81% believed the current tax regime was unfair on new buyers.

Seven in 10 thought the threshold for stamp duty, which currently stands at £60,000, should be raised to reflect rising house prices.

The average first-time buyer in Scotland currently pays £82,654 for a home, compared to £40,918 in 1993.

Research carried out by the bank found that UK residential stamp duty tax has gone up more than ninefold in that period, from £465m in 1993/4 to an estimated £4,300m during the current tax year.

Unfair play

Tim Crawford, group economist at Bank of Scotland, said successive governments, both Tory and Labour, had "failed to play fair" with homeowners by not linking the stamp duty threshold to house price inflation.

Twelve years ago most first-time buyers were below the threshold, whereas now the average buyer is charged £826.

Successive governments, irrespective of their political colouring, have failed to play fair by homeowners Tim Crawford Bank of Scotland Group Economist

More homeowners are also paying the higher rate, which is charged on properties which change hands for more than £250,000.

Stamp duty revenue in Scotland is estimated to hit £150m in 2003/4.

The UK Government estimates that it would have lost £570m if the threshold were raised to £150,000, in line with house price inflation.

'Two-way street'

Mr Crawford said: "Housing activity is an important part of the Scottish economy, and it is right that a government should take its fair share of tax revenue from it.

"Fairness is a two-way street, however, and unfortunately successive governments, irrespective of their political colouring, have failed to play fair by homeowners by declining to index link the stamp duty threshold to house price increases.

"All the main political parties are in favour of helping first-time buyers get onto the housing ladder, so it must be the case that none of them intended that the average first-time buyer should now be paying stamp duty.

"Bank of Scotland also believes that all the residential stamp duty thresholds should be linked to house price inflation."