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Home buyers spent an estimated £7.7 billion on Stamp Duty in England and Wales in the year to March 2015, new data shows, with the average home owner spending nearly £10,000. Home owners in London who bought for the first time in 1999 will now, on average, have spent over £38,000 in Stamp Duty over their lifetime and the typical Stamp Duty bill for a third stepper has fallen by £2,500 or 26% over the past year due to December’s reform of the tax. The research from Lloyds Bank shows that overall revenue raised increased by an estimated £1.5 billion, comfortably exceeding the £6.2 billion in the year to March 2008 at the peak of the last housing boom. In contrast, in the 12 months to March 1999, less than £1 billion was raised. A higher number of residential property transactions and increased prices are estimated to have led to a significant rise in Stamp Duty and the research also found that home owners stay in their homes for just under eight years on average, and take three steps up the ladder in their lifetime. The proportion of first time buyers paying Stamp Duty has more than doubled over the past 16 years from 32% in 1999 to 66% in 2015. In London and the South East over nine in 10 first time buyers now face paying Stamp Duty on their purchase. The proportion of home movers paying Stamp Duty has risen from 68% in 1999 to 85% in 2015. In the southern regions of England more than nine out of 10 home movers now pay Stamp Duty on their purchase. The highest overall Stamp Duty costs are faced by buyers in London and the South East. In London home buyers pay four times as much as the average for England and Wales at £38,600 while in the South East the lifetime cost is £22,800. The lowest lifetime Stamp Duty costs are in Wales which, at an average of £3,800, are less than 40% of the England and Wales average. Home owners in the North and East Midlands both at £4,000 and Yorkshire and the Humber at £4,500 face the next lowest Stamp Duty charges. Based on regional average house prices for typical first time buyer homes in 1999, Stamp Duty was only a factor for those first time in London and the South East. By the time these people were ready to move on to their next home (in 2007), the average Stamp Duty for their new property had risen to £2,283. In May 2015, those buyers moving on to their ‘final’ home faced an average Stamp Duty bill of £7,400, some £2,500 or 26% lower than in May 2014. The decline in Stamp Duty is due to the reforms that were implemented last December. Under the new progressive structure of Stamp Duty no tax is paid on any of the value of a property below the… Continue reading →
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