5% Stamp Duty to cost prime buyers an extra £17,000 on average

Published 01st Mar 2011

The UK's prime house buyers will have to pay an extra £17,112 in Stamp Duty Land Tax (SDLT) 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 SDLT 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 SDLT 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."

Source: ' UK Property News '

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