HBOS calls for stamp duty reform

The Halifax Bank of Scotland Group (HBOS) has called for the thresholds at which stamp duty is currently levied to be adjusted to reflect the rapid increase in house prices in house prices in the last ten years.

Halifax has looked at house sales and property prices in 2,132 postcode districts in England and Wales to examine the stamp duty thresholds that have applied. HBOS estimates that the number of properties sold in the last five years above the £250,000 (or 3 per cent) threshold) has increased by 281 per cent. In 2001 there were 73,403 homes sold above this threshold, while in 2006 there were 279,408 such homes.  In 2001, six per cent of homeowners paid stamp duty of 3 per cent or more. By 2006 this had increased to 19 per cent of home buyers.

Stamp duty revenue has increased similarly during the five year period, up 114 per cent from £2.1 billion in 2000/01 to $4.6 billion in 2005/06. Revenue from sales of properties valued at more than £250,000 increased by 175 per cent from £1.2 billion five years ago, to £3.4 billion in the last financial year. The higher stamp duty bands now represent 74 per cent of total residential stamp duty compared with 58 per cent five years ago.

Halifax estimates that 19 per cent of the properties in England and Wales are now valued above the £250,000 threshold, with 3 per cent valued above the £500,000 threshold. Most of these homes are in London and the South East, with 71 per cent of London postcode districts and 54 per cent of postcode districts in the South East above the 3 per cent barrier. There are now 485 postcode districts where the average house price is above the 3 per cent threshold, compared to 111 five years ago.