First Time Buyers Hit By Stamp Duty Freeze

11.10.00am UTC (GMT +0000) Fri 22nd Oct 2004

New figures released to the Liberal Democrat Shadow Chief Secretary, David Laws MP, show that first time buyers and those at the lower end of the housing market are being hit with large bills for Stamp Duty.

Gordon Brown has failed to uprate the Stamp Duty threshold since Labour came to power. But with house prices in some parts of the country up by 200% over this period, stamp duty has become a tax paid by the overwhelming majority of house buyers.

Answers to a written a Parliamentary Question show that when Labour came to power 56% of homebuyers paid no stamp duty at all but in 2003 only 23% of people were exempt from Stamp Duty.

David Laws said:

"These figures show that first time buyers are facing a double squeeze - not only from higher house prices but by being swept into the stamp duty net.

"Gordon Brown has failed to uprate the stamp duty threshold for house purchases since Labour came to power - and indeed the £60,000 threshold is stuck at the same level as in 1993. This is grossly unfair to those on low incomes and to first time buyers who are struggling to get onto the first rung of the property ladder.

"In London, and the south of Britain, there can now be very few first time buyers and other low income buyers who are escaping this tax.

"It is clear that it is now time to radically reform this tax by significantly increasing, perhaps even doubling, the tax free threshold, and by reforming the irrational rate structure. This should be a revenue neutral reform.

"Not only does stamp duty now apply too far down the property price ladder, but there are bizarre incentives to distort property price sales to avoid sudden leaps in the stamp duty bill at particular thresholds. The Chancellor must tackle these problems in his Pre-Budget Report."