Buyers in England and Wales paid 17% more in stamp duty tax in 2016
Home buyers in England and Wales paid £8.3 billion in stamp duty in 2016 compared with £7.1 billion in 2015, a 17% increase which is contributing to the cost of moving home, a new analysis shows.
The average home owner pays £12,693 in stamp duty over their lifetime as they move up the housing ladder and those in London who bought for the first time in 2001 will have spent an average of £40,576 in stamp duty.
The research from Lloyds Bank shows that 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.
The rise in 2016 reversed the £571 million decline between 2014 and 2015, which resulted from the stamp duty reforms that came into place in December 2014, the data also shows.
‘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,’ said Andrew Mason, Lloyds Bank mortgage products director.
‘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 home movers, with those in Greater London paying over £40,000. Escalating stamp duty payments have contributed to significant increases in moving costs in recent years,’ he added.
The highest overall stamp duty bills are paid by buyers in London and the South East. In London they pay a total of £40,576 or 320% more than the average for England and Wales. In the South East, the overall bill is £20,133 while the lowest bills are in the North at £4,212 and Wales at £4,489.
Other research findings show that the proportion of first time buyers paying stamp duty has risen in the past 16 years from 47% in 2001 to 78% in 2017. In Greater London, 100% of first time buyers face paying stamp duty with 98% of first time buyers paying the tax in the South East. The only region where fewer than half of first time buyers pay stamp duty is the North 41%.
In the southern regions, nearly all home movers now face paying stamp duty with the data showing it is 100% in London, 99% in the South East, 97% in the South West and East Anglia. By comparison, 72% of home movers in the North and 78% in Wales pay stamp duty.