Also four out of every five homes sold this year and last will be subject to Stamp Duty when they are sold again within five years, the research from the Taxpayers’ Alliance has found.
The research points to the fact that property price forecasts, such as that by Savills Research, imply a huge increase in the number of homes which will be subject to punitive rates of Stamp Duty.
Stamp duty is a property tax paid by buyers in the UK when a property is sold with the money going to the Exchequer. There is a starting level of £125,000 and then it rises according to the price of the property.
The forecast price rises will lead to nearly 100,000 homes which incurred 1% Stamp Duty in 2012 and 2013 seeing that tax more than triple as they become subject to the 3% rate of Stamp Duty. The average bill for those properties will rise from £2,319 to £8,445 by 2017/2018.
Some 99% of homes in London will be liable for Stamp Duty in five years and five out of six homes will be subject to the 3% rate while thee in five homes sold in the North West will be liable for Stamp Duty in 2017/2018.
The fastest increase in the number of homes liable for Stamp Duty will be in the East Midlands where the number of properties subject to Stamp Duty will rise from 50% to 71% and three in five homes in the South East will be subject to Stamp Duty at the 3% rate or higher.
Over half of all homes in every region of England and Wales will be subject to Stamp Duty by 2017/2018, including in 306 out of 347 local authority areas.
‘As the property market recovers, more and more people will be sucked into paying punitive rates of Stamp Duty and it will be more expensive to move than ever,’ said Matthew Sinclair, chief executive of the TaxPayers’ Alliance which is campaigning for the property tax to be reduced.
‘High Stamp Duty rates stop young people buying a home and starting a family, discourage elderly people from downsizing and make it harder to move to a new place for a new job. The Government urgently need to cut Stamp Duty and ease the burden before the situation gets even worse,’ added Sinclair.
