Over the last decade there has been a ten-fold increase in the governmental yield generated by the property tax, rising to £6.4 billion for the tax year 2006/07, with the average house price now around £75,000 more than the nil band tax rate.
Indeed Halifax research highlighted the ravine which has opened up between house price inflation and stamp duty, with borrowers in only four UK regions escaping the tax.
Considering that the the Council of Mortgage Lenders (CML) found the current nil band rate for stamp duty would be £171,000 if it had been raised in line with house price inflation over the last decade, leading industry figures have been vocal in their calls for the Chancellor to seriously rethink the current system.
Nicholas Leeming, major client director of propertyfinder.com, urged the governement to 'intervene,' saying: "They should raise the lower threshold to a sensible level to help first-time buyers on to the ladder, and introduce marginal bands for everyone."
Robert Bryant-Pearson, chief executive of Allied Surveyors, agreed with Leeming, proffering his suggestions for a 'radical shake up': “I would urge Government to revolutionise the system by scrapping existing threshold triggers.
"I firmly believe that the first £200,000 of any property sale should be free of duty and thereafter a single fixed rate should be payable, but only on the amount over £200,000.
“It is ridiculous that currently in a sale at £250,000, the purchaser pays £2,500 stamp duty but at £250,001, this rockets to £7,500 because the next 3 per cent band applies, not just the part above £250,000 but to the entire price - the Chancellor must correct this untenable levy.”
Andrew Hagger of Moneyfacts called the £5,000 nil band rate increase in 2006 nothing more than a token gesture: “The current stamp duty threshold is totally out of line with the housing market.
"Without positive action from the Government in the budget on Wednesday, there is real danger that getting on to the property ladder will be nothing more than a dream for the vast majority of would be homeowners."
