Halifax data reinforces stamp duty reform call

22 March 2006
New data from Halifax has shown that the average cost of a detached house has risen above the three per cent stamp duty threshold in a majority of the English regions.

The average price has broken through the £250,000 barrier in the north west, west midlands, south east, south west, East Anglia and London, the mortgage lender's monthly housing market survey demonstrated yesterday.

In London, moreover, the average price of a detached house is over £500,000 – the threshold for four per cent stamp duty – while the average price of any property is above the quarter of a million mark, at £257,120.

As a result, the amount of revenue raised by the government from stamp duty has tripled from £1.8 billion in 1999-2000, to £5.5 billion in 2004-2005.

Massive house price inflation in the last ten years has seen even modest dwellings pushed into a price bracket that was once reserved for the super-rich.

Calls for the chancellor to take action in today's budget have been growing in recent weeks, particularly demands for the replacement of the current 'slab' system – whereby a seller is liable for the relevant rate of stamp duty on the total value of a property – with a marginal one.

This would work in the same way as income tax, with only the proportion of the value of a property in excess of the threshold being liable for the higher rate.

Sarah Atkinson, consumer and public affairs manager at Nationwide, suggested that there may be hope that the chancellor will take heed of these calls.

"No one thought there would be a change last time when the threshold was raised", she pointed out.

In the 2005 budget, Gordon Brown doubled the value at which properties are liable for stamp duty at one per cent, from £60,000 to £120,000.

To read more about property, click here.

track© Adfero Ltd