According to Portman, stamp duty taxes for the three months to 30 June saw a 30 per cent increase in revenue to the government compared to the first quarter of 2006, with the amount paid per property increasing 6 per cent.
Using sales data from the Land Registry, Portman has calculated that despite the government’s decision to raise the stamp duty threshold at the end of March this year, the total stamp duty paid in Quarter 2 2006 reached £1,002 billion, £229 million more than in Q1 before the change.
Portman’s calculations show that the government’s decision to increase the stamp duty threshold to £125,000 in March 2006 from £120,000 set the previous year, has not had the desired effect of alleviating the burden of this tax for many.
Whilst total house sales between Quarter 1 and Quarter 2 2006 have increased from 218,770 to 268,430, the average quarterly figure for stamp duty paid per property has still increased from £3,477 to £3,735. This is even higher than it was in the first quarter 2005 before the major change in threshold (from £60,000 to £120,000) when the average was £3,184.
Matthew Wyles, group development director at Portman Building Society, commented: “Stamp duty continues to be a deeply unfair tax to all who pay it. The burden of this tax will continue to increase unless the Government undertakes a radical alteration to its policy in this area and abandons its current strategy of making the occasional cosmetic tweak to the threshold to keep criticism at bay. The second quarter of 2006, notwithstanding the increased number of house sales, has seen a vast increase in the amount of stamp duty paid to the government – increasing 30 per cent from 2006 Q1 alone.
“Whilst the threshold increases have been assured by the government to help first-time buyers they seem to have had little effect. The average first-time buyer property now costs £147,868 (over £22,000 more than the new threshold level) and whilst people may be able to buy their first homes for below the threshold in certain areas of the country, the change offers little or no relief to those who want to get on the property ladder in London or the South.”
