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Last Updated: Monday, 5 March 2007, 09:39 GMT
House price boom 'fuels tax take'
For Sale signs
The buoyant housing market is boosting stamp duty revenues
Rising property prices mean that nearly a fifth of homebuyers have to pay stamp duty at a higher-than-standard rate, a report has said.

Halifax bank said the percentage of homebuyers paying 3% stamp duty had risen from 6% in 2001 to 19% in 2006.

Stamp duty at 3% kicks in when a property is bought for between 250,000 and 500,000.

London and the South East account for nearly two-thirds of the homes attracting stamp duty at 3%.

In some London boroughs, such as Kensington and Chelsea, all but a tiny percentage of properties sell for more than the 250,000 mark.

Revenue boost

STAMP DUTY RATES
Below 125,000 zero rate
Above 125,000 1%
Above 250,000 3%
Above 500,000 4%

The government collected about 4.6bn in stamp duty in the 2005/2006 tax year - an increase of 114% on the 2000/2001 figure.

The Halifax said government revenues were set to increase further as house prices increased far more rapidly than stamp duty thresholds.

"Bracket creep has been a key factor as a growing percentage of property sales now occur above the higher stamp duty thresholds of 250,000 and 500,000, which have not been changed since their introduction in 1997," Tim Crawford, group economist at Halifax, said.

"Nearly a quarter of postcode districts in England and Wales now have an average price above the 3% stamp duty threshold of 250,000, compared to only one in 20 districts five years ago," he added.

The Halifax called on the chancellor to increase the level of stamp duty in line with the rise in house prices in the Budget on 21 March.

In response, the Treasury said that five out of six homebuyers either paid no stamp duty or just 1%.


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