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Halifax reveals 281% rise in Stamp Duty

Halifax estimates there has been a shocking 281% rise in the number of home sales in England and Wales attracting a 3% rate of Stamp Duty in the past five years.

The number of properties priced above the £250,000 threshold at which a 3% rate of Stamp Duty is levied has increased from 73,403 in 2001 to 279,408 in 2006.

This accounts for 19% of total home buyers that were faced with a Stamp Duty bill of at least £7,500.

The bank attributes 89% of the rise in Stamp Duty revenue of the past five years to an increase in the amount raised at the higher Stamp Duty bands – 3% on sales between £250,000 and £500,000 and 4% above £500,000.

Total Stamp Duty revenue from residential property sales was £4.6bn in 2005/06, up 114% from the £2.1bn raised in 2000/01.

Stamp Duty revenue raised from sales of properties valued at more than £250,000 rose by 175% from £1.2bn in 2000/01 to £3.4bn in 2005/06.
The higher Stamp Duty bands accounted for 74% of total residential Stamp Duty revenue in 2005/06 compared with 58% in 2000/01.

Halifax estimates that 3.5 million English and Welsh properties, or 19% of housing stock, are now valued above the £250,000 Stamp Duty threshold and 600,000 or 3% are valued above the £500,000 threshold.

London and the South East account for 64% of homes valued above £250,000 and 77% of homes valued above the £500,000 threshold.

There has been a more than four-fold increase in the number of postcodes where the average house price is above the 3% Stamp Duty threshold.

The average house price in 485 postcode districts in England and Wales is now above the £250,000 threshold, compared to 111 districts in 2001.

There are 206 postcode districts in England and Wales which have seen at least a 30 percentage point increase in the proportion of home sales above the 3% Stamp Duty threshold over the past five years.

The largest increase has been in BR4 in West Wickham in London, up 60 percentage points from 19% of sales in 2001 to 79% in 2006. The next biggest increases were in IG4 in Ilford in London with a 59 percentage point increase and GL19 in Gloucester with a 55 percentage point rise.

Sales above the 3% Stamp Duty threshold accounted for at least 25% of property sales in 667 postcode districts across England and Wales in 2006, compared with 181 districts in 2001.

These include 71% of London postcode districts and 54% of postcode districts in the South East.

All regions of England and Wales have at least 5% of postcode districts with more than 25% of home sales above the 3% Stamp Duty threshold.

SW7 in Kensington and SW1W in Sloane Square in London are the two postcode districts with the highest percentage of sales above the 3% Stamp Duty threshold – at 98% and 97% respectively.

B94 in Solihull is the postcode district with the highest proportion of housing sales above the 3% threshold outside the south of England (78%), followed by NE20 near Newcastle upon Tyne (70%).

The Stamp Duty payable on the average house sale has at least tripled in 18% of postcode districts over the past five years, reflecting a shift in the average Stamp Duty rate from 1% to 3% in these districts.

YO62 in York has seen the biggest increase with the average bill up 601% from £1,087 in 2001 to £7,620 in 2006. WN8 (585%) near Pemberton in the North West and TR26 (583%) in St Ives in the South West have seen the next biggest rises.

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