Five in six London homes bought in 2017-18 will incur the 3% Stamp Duty rate by 2017/18 – or even higher rates.
That means 83% of home-buyers will pay at least £7,500 in Stamp Duty by that time, due to rising house prices in the capital, according to the TaxPayers’ Alliance.
The research suggests that a whopping nine in 10 homes in each of the following boroughs will be subject to the 3% Stamp Duty rate or more by 2017/18: Lambeth, Barnet, Kingston, Hackney, Tower Hamlets, Wandsworth, Islington, Richmond, Hammersmith and Fulham, Camden, Westminster, Kensington and Chelsea and the City of London.
Some 99% of London homes of the London homes sold in 2012/13 would in theory be subject to Stamp Duty (1% or higher) by 2017/18, as values for that proportion of homes are expected to exceed the £250,000 Stamp Duty threshold, according to house price research from Savills.
Barking & Dagenham will be the least-affected borough when it comes to Stamp Duty, but even there, 19 in 20 homes will be subject to the tax.
This follows the news earlier this month that two in three London homebuyers already pay £7,500 or more in Stamp Duty (at 3% or higher rates).
The 3% rate applies to homes worth £250,000 to £500,000, meaning that they pay between £7,500 and £15,000 in Stamp Duty. Homes worth more than £500,000 pay 4%, rising to 5% on homes sold for £1m+.
Stamp Duty raised £4bn in revenue for the Treasury last year, with London contributing some 45% of that total.
Nationwide, the TaxPayers’ Alliance is predicting that four in every five homes sold in 2012/13 will be subject to Stamp Duty in 2017/18 (at 1% or higher). It forecasts that two in five UK homes will be subject to the 3% rate or higher in 2017/18.
Matthew Sinclair, CEO of the TaxPayers’ Alliance, said: “As the property market recovers, more and more people will be sucked into paying punitive rates of Stamp Duty and it will be more expensive to move than ever.
“High Stamp Duty rates stop young people buying a home and starting a family, discourage elderly people from downsizing and make it harder to move to a new place for a new job.
“The government urgently need to cut Stamp Duty and ease the burden before the situation gets even worse.”