Presenting the Budget today, the Chancellor has increased the stamp duty threshold from £60,000 to £120,000.
Halifax calculates that the stamp duty threshold would currently be £156,900 if it had been increased in line with the rise in house prices since March 1993 - the last time that the threshold was increased.
Key facts:
- The Chancellor has doubled the stamp duty threshold from £60,000 to £120,000.
- 44% (157,000) of FTB transactions across the UK in 2004 were between £60,000 and £120,000 and will benefit from the increase in the threshold. 55% (198,000) of FTB transactions were under £120,000 in 2004.
- The average FTB in 56% of UK towns paid between £60,000 and £120,000 for their first property in 2004.
- Northern Ireland (100%), the North (100%), Scotland (93%), the North West (92%) and Yorkshire & the Humber (90%) were the regions with the highest percentage of towns with average FTB house prices between £60,000 and £120,000 in 2004.
- The North West (29,000), Scotland (27,000), Yorkshire and the Humber (24,000) and the West Midlands (19,000) had the highest number of FTB sales beneath £120k in 2004.
- The South East (50,000), London (50,000), the South West (14,000) had the highest number of FTB sales above £120,000 in 2004.
- 43% of UK towns have an average FTB price above £120,000, showing that a significant portion will not benefit from an increase in the threshold to £100,000.
- The Government currently takes around £4 billion each year from residential stamp duty. Figures in the Budget papers estimate the cost of the increase in the stamp duty threshold to be £250m in 2005/06.
Martin Ellis, Chief Economist at the Halifax, commented: "First time buyers will be glad that the Chancellor has increased the stamp duty threshold to £120,000. Halifax has been actively lobbying for a long, overdue change to the threshold.
"We would have liked to have seen the Chancellor go a step further and link stamp duty to house price inflation – hopefully, he will do so another day."
