Homebuyers in every region of England now have to pay stamp duty on an average priced home, sending £8bn to the Treasury so far this year.
Coventry Building Society’s analysis of latest HMRC statistics reveals that while bills remain highest in London and the South East, buying an average priced home in traditionally more affordable areas now comes with some stamp duty to pay, with not a single part of the country escaping the tax.
That’s due to the nil-rate threshold being halved from £250,000 to £125,000 on 1st April – a change that added £2,500 to the tax on an average priced home – taking it from £2,047 to £4,547.
Prior to the changes, anyone buying an average priced home in the North East, Yorkshire and the Humber, the North West, East Midlands and West Midlands would not have had to pay any stamp duty.
REPLACING STAMP DUTY
In July buyers paid £1.4bn in stamp duty, a 35% increase from the £1.1bn paid in June. That brings the total paid so far this year to £8bn – an 21% increase on the £6.6bn paid in the same period last year.
Earlier this week Property Soup reported that the Treasury is considering replacing stamp duty with a new property tax, paid on homes sold for more than £500,000
Jonathan Stinton, Head of Intermediary Relationships at Coventry Building Society, says: “The fact that there’s now nowhere to hide from stamp duty shows just how out of step this tax has become.
“From London to the North East, those buying a typical home in any region are now being hit with a tax that can add thousands to the cost of moving.
“There’s speculation of a new property tax, which would shift the burden from buyers to sellers – removing one of the biggest upfront hurdles people face – but it comes with a risk of market distortion.”
DELAYING MOVES
He adds: “The prospect of reform could make buyers and sellers delay their moves while they wait for clarity. Once in force it could reduce the supply of new homes coming onto the market, or warp house prices – with some owners trying to sell under £500,000 to stay below the threshold, and others increasing prices to offset the tax.
“The principle is right: our property taxes should fit today’s housing market, not the one we had decades ago. But it’s vital the detail is carefully designed so we don’t swap one barrier for another.”
REGIONAL BREAKDOWN
