Money News
New analysis of 2132 postcode districts across England and Wales by the Halifax shows that over the past 5 years there has been a 281% rise in the number of home sales above the £250,000 threshold at which a 3% rate of stamp duty (minimum £7,500) is levied. The number of residential property sales attracting at least 3% stamp duty has increased from 73,403 in 2001 to 279,408 in 2006. In 2006, 19% of home buyers paid at least 3% stamp duty compared with 6% in 2001.
Total stamp duty revenue from residential property sales was £4.6 billion in 2005/06, up 114% from the £2.1 billion raised in 2000/01. 89% of the rise in the residential stamp duty take over the five years was due to an increase in the amount raised at the higher stamp duty bands (3% on sales between £250,000 and £500,000 and 4% above £500,000).
Halifax estimates that 3.5 million (19%) English and Welsh properties are now valued above the £250,000 stamp duty threshold; and 600,000 (3%) are valued above the £500,000 threshold. London and the South East account for 64% of homes valued above £250,000 and 77% of homes valued above £500,000.
There has been a more than four-fold increase in the number of postcodes where the average house price is above the 3% stamp duty threshold. The average house price in 485 postcode districts (23%) in England and Wales is now above the £250,000 threshold, compared to 111 districts (5%) in 2001.
Meanwhile, 206 postcode districts in England and Wales have seen at least a 30 percentage point increase in the proportion of home sales above the 3% stamp threshold over the past five years. The largest increase has been in BR4 in West Wickham in London, up 60 percentage points from 19% of sales in 2001 to 79% in 2006. The next biggest increases were in IG4 in Ilford in London with a 59 percentage point increase and GL19 in Gloucester with a 55 percentage point rise.
The stamp duty payable on the average house sale has at least tripled in 18% (374) of postcode districts over the past five years, reflecting a shift in the average stamp duty rate from 1% to 3% in these districts. YO62 in York has seen the biggest increase with the average bill up 601% from £1,087 in 2001 to £7,620 in 2006. WN8 (585%) near Pemberton in the North West and TR26 (583%) in St Ives in the South West have seen the next biggest rises.
The current structure of stamp duty (on the entire property) is: Less than £125,000, zero; £125,000< £250,000, 1%; £250,000< £500,000, 3% and £500,000+ 4%.
05 March 2007 © Moneyextra.com
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