Stamp Duty increase is seven times greater than the rate of inflation

The Homeowners Alliance has conducted a report on stamp duty prices, and has announced that the costs have increased at a rate of seven times above inflation. Prices have increased so much since the 1990’s that twenty years ago the stamp duty tax equated on average to one weeks salary while today home owners can expect the tax on average to be three months earnings. The alliance is calling for changes surrounding the levy and blames the tax for hindering the market, saying that it is being “choked”, with the chief executive stating that “The reality is that it’s [the government’s] ‘home tax’ is taxing their [home owners] aspirations to death.” These statements are supported by figures from the Office of National Statistics which say that the number of home owners has fallen to 64% in 2011, down from 69% just ten years earlier. Residential property is subject to stamp duty at a varying rate depending on the price of the property. Anything below £125,000 is subject to no stamp duty. The government rely heavily on revenues generated by stamp duty, with revenue in 2007 around £6.68 billion, an eight times increase from ten years before when revenue stood at just £830 million. The Alliance argues that while the increase will have generated a steady income for the government, if they made changes to reduce stamp duty more people would opt to move house instead of making improvements to their homes which in the long run would increase the revenue generated by stamp duty. The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.  Setfords Solicitors are a national full service law firm, with residential  property solicitors in Nottingham and across the country.