This is more than four times the amount they paid in 1997. Stamp duty, at £5.5 billion, accounted for most of the tax paid by home-owners, but inheritance tax bills on property rose to £1.1 billion, compared to £480 million in 1997.
In the Review, published jointly by the Council of Mortgage Lenders and the Chartered Institute of Housing, Professor Steve Wilcox, of the Centre for Housing Policy at the University of York, analyses gross tax paid on residential property since 1991. He concludes that stamp duty and inheritance tax payments are growing even faster than the amount the Government would take if it levied capital gains tax on housing wealth.
Professor Wilcox points out that in the 12 months to 2004/05, the most recent year for which Inland Revenue data is available, the amount paid by home-owners in stamp duty and inheritance tax grew by almost £2 billion or by 41per cent.
By contrast, the Government's decision to raise the stamp duty threshold from £60,000 to £120,000 before the general election in 2005 will reduce payments on residential property by only £250 million, or by 6.5 per cent. And even this modest sum is set to reduce as the number of homes sold for less than £120,000 declines.
Publication of the Review coincides with the pre-Budget statement, due on 5 December, during which the Chancellor will update MPs on his tax and spending plans. In its pre-Budget submission, the CML highlighted the complex range of Government policy proposals currently affecting mortgage and housing markets. It estimated that new Government initiatives were expected to add £1,000 to the cost of buying a home, over and above the growing burden of taxation on home-ownership.
Commenting on the Review, the CML's deputy director general Peter Williams said: "The findings on tax reinforce one of the key points in our pre-Budget submission, namely the growing financial burden on home-ownership created by Government policy. We applaud the Government's election pledge to expand owner-occupation, but the reality is that this goal is in danger of being thwarted by growing cost and complexity of policy proposals and taxation measures."
