Rising House Prices increase revenue from Stamp Duty

Nearly 20% of all home are valued at greater than £250,000. This means that purchasing these properties incurs a stamp duty of 3% rather than 1%. This was published in a report by Halifax Bank, Britain’s biggest mortgage lender

There are also 600,000 homes – 3 per cent of the whole market – valued at £500,000 or more. Buyers of these homes must pay stamp duty at the highest rate of 4 per cent.

The rapid increase in house prices has led to a windfall for the Treasury. In 2006 the Treausry received £4.6nb in stamp duty up from £2.1bn in the previous financial year.

With the IMF recently criticising the UK for an increasing budget deficit it is likely the UK government will be reluctant to increase the value of stamp duty in line with inflation.In 1996-97, the tax raised only £675m.