5% Stamp Duty to cost prime buyers an extra £17,000 on average
23rd February 2011
- April’s increase in stamp duty will cost £1m+ buyers £17,112 extra on average
- The average stamp duty paid on £1m+ properties was £68,449 in 2010
- Increased stamp duty will take average duty to £85,561 from April 6th
- Total stamp duty on £1m+ properties will rise to £565m from £452m in 2010
The UK’s prime house buyers will have to pay an extra £17,112 in stamp duty when rates increase from 4% to 5% for properties over £1m in April. The increase will bring an extra £113m into the government coffers according to research by leading property website Zoopla.co.uk.
In 2010, there were 6,610 property transactions conducted in Britain at a value over £1m with an average sale price of £1.71m, resulting in an average stamp duty payable of £68,449 and a total take by the government on £1m+ properties of £452m. As of April 6th the average figure for £1m+ transactions will rise to £85,561 with the government collecting £566m p.a., an extra £113m annually at the expense of the British property millionaire.
Closer analysis shows that as much as being a wealth tax, the increase in stamp duty at the £1m threshold is a regional tax since 85% of the total stamp duty paid on £1m+ properties last year came from transactions in London and the South East.
Nicholas Leeming of Zoopla.co.uk, commented: “The government has identified a rich seam of revenue by raising taxes on those buying the most expensive properties in the country. However, with £1m buying little more than a 2 bedroom flat in some parts of the capital, the extra stamp duty will not be insignificant for families trying to move up the property ladder in and around London, where the lion’s share of the burden will fall. We may see a small tick up in transactions ahead of April with some buyers trying to beat the deadline but overall the rate change is unlikely to have a major impact on the performance of the prime market over the longer term.”
Stamp Duty increase on ￡1m+ transactions by region
|Region||# sales 2010||Avg price 2010||Total duty at 4%||Total duty at 5%||Total increase|
|East of England||468||£1.42m||£26.6m||£33.2m||£6.6m|
|Yorkshire and The Humber||53||£1.35m||£2.9m||£3.6m||£0.7m|
Stamp Duty increase on ￡1m+ transactions by top London boroughs
|Rank||Borough||# sales 2010||Avg price 2010||Total duty at 4%||Total duty at 5%||Total increase|
|1||City of Westminster||831||£2.00m||£66.50m||£83.12m||£16.6m|
|2||Kensington & Chelsea||534||£2.49m||£53.27m||£66.59m||£13.3m|
|4||Hammersmith & Fulham||344||£1.65m||£22.76m||£28.44m||£5.7m|
|5||Richmond upon Thames||293||£1.60m||£18.74m||£23.43m||£4.7m|
- Ends -
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