Since 2003 our Government has collected more than £45bn in stamp duty receipts from British householders buying homes across the UK.
The figures disguise a massive increase in the impact of stamp duty land tax (SDLT) over this period as the volume of property purchases and sales has actually fallen by 45%. Ten years ago sales were 1.7m properties, in 2012-13 the equivalent figure was 928,000.
Property prices have risen in the same period. The average price of a property in the UK is now £247,693; ten years ago it was 45% lower, £170,823.
The increase in price has pushed increasing numbers of property purchases into the next SDLT banding – purchases over £250,000 and up to £500,000, are taxed at 3%. This effectively triples the SDLT charge – residential properties valued between £125,000 and £250,000 are taxed at 1%.
The Bank of England issued a cautionary statement last week: that we needed to monitor the current buoyant property market to ensure that we did not find ourselves in another “overheated” property bubble.
It will be interesting to see if the Chancellor indicates any future changes to SDLT rates in his Autumn Statement. One the one hand he will not want to reduce his tax take from the property market, by increasing rates and slowing down the market; neither will he want reduce the impact of SDLT, providing a further push to demand and the risk of another property bubble.