Ouch – data out today shows that almost two thirds of London house sales are subject to the higher-rate stamp duty of 3%. The higher rate kicks in on houses valued at £250,000 or more, meaning a tax of at least £7,500.
London has in fact contributed some 45% of the total £4bn generated by stamp duty for the government in the last year.
London and the South East have been the hardest hit by Stamp Duty taxes. According to research out today from the TaxPayers’ Alliance, based on Land Registry data, more than 60,000 London households were left paying the 3% Stamp Duty levy. Almost 50,000 (48,419) were slapped with the residential property transaction tax in the South East.
The 3% rate is applied on all properties sold between the £250,000 and £500,000 mark, 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+.
Nationally the transaction tax raised £4bn in revenue, with £3.6bn of it coming from sales in the 3% tax bracket across the UK.
The arbitrary brackets have been criticised for distorting the market and making it harder for people to get on and then to move up the property ladder, thereby inflating prices.
The Royal Borough of Kensington and Chelsea alone generated £285m in 2012/13, while even peripheral boroughs like Richmond and Merton generated £95.7m and £53m respectively.
Matthew Sinclair, TaxPayers’ Alliance’s chief executive, said: “Owning your own home is an important milestone, but for many families it seems harder and harder to reach.
“Ministers have done nothing to ease the burden imposed by Stamp Duty, which is an unfair double tax that gets in the way of would-be first-time buyers and others thinking about moving.
“Instead they have made things worse with new thresholds and new, higher rates. The Government needs to act on ministers’ rhetoric about getting people onto the property ladder and cut this unfair tax.”
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