NEW TPA RESEARCH REVEALS that nearly half of all home purchases to be hit by the 5% rate of Stamp Duty by 2022

November 13, 2017 5:37 PM

For immediate release

New TPA research reveals that nearly half of all home purchases to be hit by the 5% rate of Stamp Duty by 2022

  • New TaxPayers' Alliance research shows that 48 per cent of residential property transactions will be subject to a rate of Stamp Duty of 5 per cent or higher by 2021-22, up from 41 per cent in 2016-17.
  • Nearly 9 out of 10 residential property purchases will be subject to Stamp Duty by 2021-22, up from 8 out of 10 in 2016-17.
  • In 2021-22, the average Stamp Duty bill will be £9,221. This is £828 higher than in 2016-17.
  • Report contains regional data with Stamp Duty estimates broken down by local authority areas.
New TaxPayers’ Alliance research reveals that 9 out of every 10 homes sold in 2021-22 will be subject to Stamp Duty and that nearly half of all homes sold will be subject to Stamp Duty of 5 per cent or more, leaving buyers with an average bill of £9,221.
 
Using property price forecasts by Savills, TPA research shows that there will be a huge increase in the number of homes subject to increasingly punitive rates of stamp duty in five years time. The threat of much higher stamp duty rates will increase the pressure for the chancellor to cut this unfair tax at next week's Budget.

The TPA first launched its Stamp Out Stamp Duty campaign in 2013, and the campaign group again calls on the chancellor to act. The damaging tax means people are less likely to buy property, which means that people don't move homes even if it suits their requirements to do, such as for a new job or to downsize. This hits productivity and gums up the housing market.
 

Key findings:

England and Wales
  • 86 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 80 per cent in 2016-17.
  • 48 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 41 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £9,221. This is £828 higher than in 2016-17.
  • 96 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 93 per cent in 2016-17.
  • 61 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 53 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £8,498. This is £1,212 higher than in 2016-17.
East Midlands
  • 84 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 75 per cent in 2016-17.
  • 29 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 21 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £3,734. This is £588 higher than in 2016-17.
London
  • Seven in every thousand residential property purchases will be free from stamp duty by 2021-22.
  • 91 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 90 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £24,381. This is £1,989 higher than in 2016-17.
North East
  • 62 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 51 per cent in 2016-17.
  • 18 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 12 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £3,149. This is £495 higher than in 2016-17.
North West
  • 72 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 61 per cent in 2016-17.
  • 24 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 17 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £4,123. This is £634 higher than in 2016-17.
South East
  • 97 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 96 per cent in 2016-17.
  • 73 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 65 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £11,457. This is £1,646 higher than in 2016-17.
South West
  • 95 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 92 per cent in 2016-17.
  • 53 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 42 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £6,538. This is £1,182 higher than in 2016-17.
Wales
  • 71 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 62 per cent in 2016-17.
  • 22 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 15 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £3,149. This is £495 higher than in 2016-17.
West Midlands
  • 83 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 74 per cent in 2016-17.
  • 31 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 24 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £4,349. This is £635 higher than in 2016-17.
Yorkshire and the Humber
  • 73 per cent of residential property purchases will be subject to stamp duty by 2021-22, up from 62 per cent in 2016-17.
  • 24 per cent of residential property transactions will be subject to a rate of stamp duty of 5 per cent or higher by 2021-22, up from 17 per cent in 2016-17.
  • In 2021-22, the average stamp duty bill will be £3,832. This is £573 higher than in 2016-17.
John O'Connell, Chief Executive of the TaxPayers' Alliance, said:

"Stamp duty is a strong contender for Britain’s worst tax and unless the chancellor acts at the budget it’s going to get even worse. Hefty tax bills on property purchases not only discourage older households from downsizing, they also stop people moving around the country to take up better-paid jobs and are a major contributor to the UK’s poor productivity growth in recent years.

"By not at least increasing thresholds or cutting rates as property prices rise the government is effectively increasing taxes by the back door. Long-term this pernicious tax should be abolished outright, but  at next week's Budget Mr Hammond should simply halve all Stamp Duty rates and avoid the complex tinkering the treasury seems addicted to."

 
TPA spokesmen are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)

Media contacts

James Price
Campaign Manager, TaxPayers' Alliance
james.price@taxpayersalliance.com
24-hour media hotline: 07795 084 113 (no texts)

Notes to editors

1. Founded in 2004 by Matthew Elliott and Andrew Allum, and now with 80,000 supporters, the TaxPayers’ Alliance (TPA) fights to reform taxes, reduce spending and protect taxpayers. Find out more about the TaxPayers' Alliance at www.taxpayersalliance.com 

2. The TPA first launched its Stamp Out Stamp Duty campaign in 2013, making the case for abolishing the tax outright http://www.taxpayersalliance.com/stamp_out_stamp_duty

3. The Single Income Tax, the final report of the 2020 Tax Commission, outlined the case for abolishing stamp duty 2020tax.org

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