Stamp duty has rocketed over the past 10 years according to Halifax Bank of Scotland.

Government income has risen nine-fold as a result of rising house prices, going from $465m in 1993-1994 to £4.3bn for the 2004-2005 tax year.

The Halifax Bank of Scotland poll found that seven out of ten believed that stamp duty should be raised to reflect the asking price of a home. If stamp duty had been continually raised in line with house prices, it would now be £156,900.

Currently, the stamp duty treshold is £60,000.

81% of those polled also believed that the current tax system is unfair to first time buyers. In 1993, only first time buyers in the South-East and in London was subjected to stamp duty.However the tax is now a burden on most buyers, with the average paid out by first time buyers at £131,024.

In Wales, the increase in stamp duty has increased ten fold whilst in Scotland more first time buyers are subject to the tax.

Martin Ellis, chief economist at the Halifax, said: “Housing activity is an important part of the UK economy, and it is right that a government should take its fair share of tax revenue from it.

“Fairness is a two-way street, however, and unfortunately successive governments, irrespective of their political colouring, have failed to play fair by homeowners by declining to index link the stamp duty threshold to house price increases.”

“According to the government’s own estimates, it would cost the Exchequer around £600m to raise the lower stamp duty threshold in line with the rise in house prices since March 1993.”

Stamp Duty Tiers

Up to £60,000 - no tax

£60,001 to £250,000 - 1% tax

£250,001 to £500,000 - 3% tax

Over £500,000 - 4%

Links:

Halifax