Stamp duty sees first-time buyers suffer

25 October 2004
Those least able to pay are being hit by stamp duty, government figures have revealed.

First-time buyers and those at the low end of the market are being forced to pay the tax far more often than when Labour came to power in 1997.

With some exceptions stamp duty is paid on properties worth more than £60,000 at a rate of one per cent, no property worth more than £150,000 is exempt.

Stamp duty rises to three per cent on houses worth more than £250,000 and for properties worth more than £500,000 purchasers pay four per cent.

Liberal Democrat shadow chief secretary, David Laws MP, said: "These figures show that first time buyers are facing a double squeeze - not only from higher house prices but by being swept into the stamp duty net.

"This is grossly unfair to those on low incomes and to first-time buyers who are struggling to get onto the first rung of the property ladder.

"In London and the south of Britain there can now be very few first time buyers and other low income buyers who are escaping this tax.

"It is clear that it is now time to radically reform this tax by significantly increasing, perhaps even doubling, the tax free threshold and by reforming the irrational rate structure. This should be a revenue neutral reform.

"Not only does stamp duty now apply too far down the property price ladder, but there are bizarre incentives to distort property price sales to avoid sudden leaps in the stamp duty bill at particular thresholds.

"The chancellor must tackle these problems in his pre-Budget report."
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