New government figures reveal that rising house prices have led to a 35 per cent increase in stamp duty revenue takings on last year, signalling that it may be time that the government woke up to calls for stamp duty thresholds to change.
Julie Tomasik, residential property lawyer at Ansons Solicitors explains how stamp duty works:
“Stamp duty is a tax paid on all property bought for over £125,000. For house buyers, and especially first time buyers, it puts an extra burden on their finances at a time when they may already be feeling stretched.”
The rate of stamp duty you pay depends on the price of the property you are buying:
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Property purchase price
Stamp duty rate
£0 – £125,000
£125,001 – £250,000
£250,001 – £500,000
£500,001 – £1 million
Over £1 million – £2 million
Over £2 million
In recent years the stamp duty thresholds have not increased in line with house prices. With the average house price in the UK now at £272,000, more and more modest homebuyers are finding themselves caught paying higher rates.
Organisations such as the HomeOwners Alliance, argue that the lowest threshold should always be above the average house price – exempting buyers from having to raise extra funds for tax, and helping them get onto the property ladder. They also want to see the thresholds raised annually in line with house price inflation.
“Stamp duty is only one of the extra costs house buyers need to be aware of,” says Julie, “taking legal advice from the outset will help you establish what you need to budget for; including stamp duty, searches and surveys.”
If you are buying a home contact Julie Tomasik, head of residential conveyancing, on 01543 267 988 or email email@example.com.
Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.