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Last Updated: Monday, 5 March 2007, 01:14 GMT
Bank calls for stamp duty change
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The Bank of Scotland wants a change to stamp duty limits
A leading bank has called on the UK Government to raise stamp duty thresholds to reflect the growing price of houses.

The Bank of Scotland's research indicated the number of Scottish home sales over the upper limit has trebled in the last five years.

About one in 10 buyers in Scotland paid 3% stamp duty on the value of their new home last year.

This would have meant a stampy duty bill of at least 7,500.

Chancellor Gordon Brown raised the minimum limit for stamp duty two years ago from 60,000 to 120,000 to help first-time buyers get on the property ladder.

He raised it again last year, so that 1% stamp duty is now charged on the value of homes costing between 125,000 and 250,000.

The key factor behind this rise has been the thresholds at which the higher stamp duty rates are levied have not been adjusted since their introduction almost 10 years ago
Tim Crawford
Group economist at Bank of Scotland,

But the upper limits for the property tax have remained unchanged since they were introduced a decade ago.

The Bank of Scotland said these thresholds should be adjusted to reflect the 175% rise in house prices since 1997.

For homes which cost from 250,001 to 500,000 the stamp duty limit is 3%, rising to 4% for homes which sell for more than half a million pounds.

But the bank argued that if those thresholds had gone up in line with house price inflation since 1997, the 250,000 limit would now be 680,000 and the 500,000 barrier would be 1.36m.

Bank of Scotland estimates 52% of home buyers in Scotland paid at least 1% stamp duty last year, compared with 48% in 2001.

House prices

Their research showed the average stamp duty bill was highest in Edinburgh (at 2,027) and East Renfrewshire (1,916).

Tim Crawford, group economist at Bank of Scotland, said: "The key factor behind this rise has been the thresholds at which the higher stamp duty rates are levied have not been adjusted since their introduction almost 10 years ago.

"Bank of Scotland calls on the government to increase the stamp duty thresholds in line with the increase in house prices since the mid-90s and to commit to index linking all the stamp duty thresholds to house price inflation in the future."

Total annual stamp duty revenue from residential property sales across the UK was 4.6bn by 2006, up 114% from 2.1bn in 2001.


SEE ALSO
More homes in stamp duty bracket
07 Oct 06 |  Scotland
Bills 'deter first-time buyers'
31 Mar 06 |  Scotland
Stamp duty to start at 125,000
22 Mar 06 |  Business
Homebuyers given stamp duty boost
16 Mar 05 |  Business

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