Homeowners are paying more than ever before in stamp duty as a result of soaring house prices despite reforms introduced in December 2014 to reduce the levy, new research shows. According Lloyds Bank, the average home owner will pay £12,693 in stamp duty over their lifetime as they move up the housing ladder. The highest […]
Homeowners are paying more than ever before in stamp duty as a result of soaring house prices despite reforms introduced in December 2014 to reduce the levy, new research shows.
According Lloyds Bank, the average home owner will pay £12,693 in stamp duty over their lifetime as they move up the housing ladder.
The highest overall stamp duty bills are faced by buyers in London and the South East.
In London, homebuyers pay a total of £40,576 – 320% more than the average for England and Wales.
In the South East, the overall bill is £20,133. The lowest bills are in the North at (£4,212) and Wales (£4,489).
A typical first-time buyer would have paid an average stamp duty of £758 in March 2001, £1,989 for their second home in March 2009 and £9,946 for their final step in March 2017.
Stamp Duty Land Tax is a progressive tax that you start paying on properties worth more than £125,000. As the price of the property increases, so does the rate of stamp duty.
In December 2014, the Government scrapped the old slab structure and introduced a new banding system to help benefit anyone purchasing a home priced under £937,500. Those buying a home above this amount now face a bigger tax bill.
You now pay 0% up to £125,000; 2% to £250,000; 5% to £925,000; 10% to £1.5million and 12% above that.
Andrew Mason, Lloyds Bank mortgage products director, said: “Rising house prices have caused stamp duty payments to continue to increase despite the reforms that came into effect from December 2014. As a result, the £8.3 billion raised in stamp duty in 2016 was more than £2 billion higher than at the peak of the last housing boom in 2007.
“The average home buyer pays £12,693 in stamp duty in total as they move up the housing ladder. This average, however, disguises substantial regional differences with homemovers, with those in Greater London paying over £40,000. Escalating stamp duty payments have contributed to significant increases in moving costs in recent years.”
The Government made £8.3 billion in stamp duty from the sale of all residential property in 2016, compared to the £7 billion raised the previous year.
This figure was boosted by last year’s 3% stamp duty increase on buy-to-let and second homes which managed to bring in a total revenue of £1.19 billion for the Treasury.
