Most England and Wales home buyers are £4,500 better off since stamp duty change
It is quite common for changes to a tax regime to benefit the Treasury and not the hard pressed working man or woman, but the recent changes to the stamp duty has done both. The new structure is progressive and was introduced a year ago, but the Treasury is collecting a record amount of the tax.
Previously a buyer paying the current average house price of £273,531 would have paid out £8,205 in stamp duty, today under the new arrangements they would pay just £3,676 a saving of £4,529. Craig McKinlay, mortgages director at the Halifax explained that changes made to stamp duty a year ago have been of significant benefit to many buyers, with only those purchasing the most expensive homes being worse off. What research carried out by the Halifax does show, is that the point at which a buyer becomes worse off is £938,000, under the new rules.
The treasury is also a winner because increased property prices and a higher number of residential property transactions boosted stamp duty revenues by 16% between 2013/2014 and 2014/2015 to a new record high of £7.5 billion. The new figure has exceeded the previous best of £6.68 billion; this was at the peak of the last housing boom in 2007/2008. To put the figures into some context, in 1994/1995 20years ago, the treasury reaped in £520 million in residential stamp duty.
The disparity between London and other parts of the country is clear when figures show that the capital accounted for 40% of all UK stamp duty revenues in 2014/2015 compared with 13% of all property transactions, revenues raised her increased by 60% from £1.9 billion in 2007/2008 to £3 billion in 2014/2015. It is clear that buyers in London have been particularly badly affected with 99% of all homes there being above the threshold of £125,000, contrast that with 45% of all home buyers in the North East, as well as 40% in the North West, Wales, Yorkshire and the Humber below the figure of £125,000.