In a recent report the Halifax has found that for the first time in 2006, the average house price in London passed £250,000 and therefore reached the next level of 3per cent for stamp duty taxes. This is £6,000 more than the average amount in the United Kingdom.
The higher stamp duty brackets of £250,000 and £500,000 were introduced in July 1997, however if they had increased in line with house prices they would now be £680,000 and £1,250,000. Halifax is calling for the government to make stamp duty index linked to house prices and increase the current threshold for stamp duty to be paid. They believe that it will encourage people to buy property. However, research conducted by GMAS-RFC suggests there is an equal split between those who can’t afford to get onto the property ladder and those who choose not to.
Our view
This government needs revenue to fund burgeoning public services costs and one its best sources is property duties either on sale duty tax, on gains taxes or on inheritance taxes. Do we really think that they will increase allowances in line with rising property prices?