The Government said today it will be consulting on the shape of a new stamp duty regime for land and...
The Government said today it will be consulting on the shape of a new stamp duty regime for land and buildings, and the consultation will include residential properties.
According to the Halifax, this new regime will be announced late next year. The Halifax says the consultation will cover both residential properties and commercial properties.
Halifax says it intends to participate in the consultation process and will be making a full submission to the Government.
Recent research from the Halifax - based on official figures - shows that tax revenue raised from both stamp duty on residential property and inheritance tax attributable to housing wealth is estimated to have risen almost five-fold from £735 million in 1992/93 to £3.6 billion in 2001/02.
In addition, the Halifax calculates that the stamp duty threshold, currently £60,000, could be raised to £118,500 if it were increased in line with the rise in house prices since March 1993 - the last time that the threshold was increased.
The inheritance tax threshold could be raised to £296,300 - £46,300 higher than its current level £250,000.It is estimated the average UK first-time buyer in 2002 paid £97,207 in the third quarter to buy their home compared to £45,249 in 1993.
Based on the current stamp duty regime, the typical first-time buyer now has to pay £972. In 1993 the typical first-time buyer paid no stamp duty because the average price was well below the £60,000 threshold.
More than 1.5 million homeowners in the UK could now face paying inheritance tax because their property is worth more than the £250,000 threshold. According to the Halifax, the 16% increase in the Inheritance Tax threshold during the last five years has fallen far short of the 77% growth in house prices during the same period. This has resulted in a more than three-fold increase in the number of properties that are now worth more than the inheritance threshold.
"There is a growing number of homeowners who are facing a rise in their tax liabilities as the government continues to decline to index property related thresholds in line with house prices" says Martin Ellis, Halifax chief economist. "We are pleased that residential properties will be included in this consultation exercise."
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