Increasing numbers of Londoners face a significant rise in stamp duty costs
. Average London property prices are nearing £500,000
. Once house prices lurch past the half-mill' threshold the stamp duty lifts from 3% to 4%. That 1% rise may not sound much.
But it's an extra £5,000-plus to find minimum if you're moving house. Which is all excellent news for the Treasury.
Rising London house prices means, the Telegraph calculates, a handy £85m extra in taxes for the Treasury from properties cresting the £500,000 barrier (indeed the Office for Budget Responsibility, recently claimed the Treasury will take an extra £37 billion in the next five years).
Currently there are five stamp duty bands: 1%, 3%, 4%, 5% or 7%, depending on price. Let's look at the tension between the 3% and 4% bands. Stamp duty for a £499,999 price would come in at £14,999.97. But cross the threshold to £501,000 and that stamp duty lifts to £20,040.
That's a year's wages for many people. No wonder many people are staying put and extending instead (often to the extreme annoyance of neighbours). Nick Barnes, head of research at Chestertons urges a flat rate across the board.
Whatever the value of the property - above a minimum zero rated value - which should more fairly reflect the average national house price at the start of each tax year - and apply a rate of, say, 2% he says.
"This will," says Barnes, "prevent the horse trading which occurs currently when a house is priced for sale at on or just above a particular threshold. This approach may well encourage more transactions – the opposite of which is likely to under the present system."
Still, move away from London (Londoners now pay more than 40 per cent of stamp duty paid in Britain) and the average house price falls to £223,000, significantly under the current 3% threshold.
Research from Lloyds now claims London home buyers pay close to three and a half times as much as the rest of England and Wales (£38,000).
How much will you pay?
"In the South East the lifetime cost is £16,500, followed by the South West (£11,500) and the West Midlands (£10,000). The lowest stamp duty costs are in Wales - £3,718 – a third of the UK average."
The average home mover now pays nearly £12,000 during their life as they make their way up the ladder claims Marc Page, Lloyds Bank mortgages director.
"This just goes to show that unfortunately some dreams still come with a price tag so homeowners need to carefully consider total costs of moving."
It's a long way from the 1990s. Just 17% of first time buyers paid stamp duty in 1998. The proportion of home movers having to pay stamp duty has increased over five times since 1998, when 17% of buyers paid the duty compared to 83% in 2014.