Stamp Duty preventing people from moving up the property ladder!

Stamp Duty preventing people from moving up the property ladder!

Since the mid 1990’s stamp duty has risen more than 7 times the rate of inflation. From an average of £532 to £5957 according to a report carried out by the Homeowners Alliance. Previously first time buyers have been exempt from stamp duty, but this is now not the case, preventing even more people from moving onto the property ladder.

On average when purchasing a new home the buyer pays 3.7% of the property price. In London when property prices have continued to rise the average stamp duty paid is £17,529. According to the report in 1995-1996 the average stamp duty bill was equivalent to eight days’ worth of earnings compared with 2001-2012 where it is worth 11 weeks wages.

 

Is Stamp Duty putting people off moving home?

Stamp Duty has now become a deterrent to people needing to move up the property ladder; instead families look for alternatives such as extensions, loft conversions and basement conversions to create extra space.

The Homeowners Alliance wants to see thresholds increase in line with house prices. And that buy-to-let investors and second home buyers should pay more than people who are buying a home to live in. They also suggest that the first threshold should be above the average house price and that first time buyers should be exempt.

Stamp Duty Thresholds

Currently 1% Stamp Duty tax is payable on homes over £125,000 then the next threshold is £250,000 - £500,000 at 3%. This means for example a house is bought for £240,000 and £2400 stamp duty is payable it then sells later for £270,000, the stamp duty has incurred an increase of 238% to £8,100.

What are your thoughts and opinions? Has Stamp Duty put you of moving?

 

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