The average stamp duty bill in England has increased 490% in the last 25 years, according to research from Benham and Reeves.
The study shows that property price inflation has seen the average SDLT bill increase from £601 in 1997 to £3,548 in 2021.
The research suggests that the property price boom, spurred in part by the recent stamp duty holiday, means that the bill is currently 44% higher than the average stamp duty paid prior to its introduction.
When removing both unique instances of the recent SDLT holiday and the reprieve granted in 2009 in the wake of the financial crisis, the average cost of stamp duty has increased by an average of 8.4% every year since 1997.
In fact, other than the two occasions where stamp duty was paused and reduced, the tax bill paid by homebuyers has only seen a year-on-year decline on four other occasions.
The first three of these came prior to, and following, the initial stamp duty break in 2009 as house prices continued to decline following the financial crisis.
The other materialised in 2015 following the switch from a ‘slab structure’ to a ‘slice’ structure whereby a property paid a percentage of stamp duty at each value threshold, rather than a full percentage based on the single threshold at which is sat.
Marc von Grundherr, director of Benham and Reeves, said: “With the latest generation of homebuyers enjoying a taste of stamp duty free property purchases there are renewed calls for its complete abolition but, as always, these will continue to go unheard.
“Over the past 25 years, the government has become very good at fuelling buyer demand while failing to address the housing crisis and building more homes. This has worked very nicely for them where an increased cost in stamp duty is concerned and their free slice of the pie, cut from the savings of struggling homebuyers, has continued to climb with absolutely no justification whatsoever.”
Oh dear… it’s that time of the week where we are force-fed yet another serving of statistical b******s from one of the regulars dishing it out.
Whoopee doo.
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“The study shows that property price inflation has seen the average SDLT bill increase from £601 in 1997 to £3,548 in 2021.”
Actually quite a chunk of it is due to the raising of the relevant rates – something that this “research” seems to have brushed under the carpet.
The average property price at the end of 1997 was around £64k. For those that weren’t around at the time, there was only one rate of SDLT which became due on the total price paid once the £60k threshold was passed. So, the “average” buyer would pay 1% of the total sum – £640 or thereabouts.
Moving swiftly forward in time, the “average” property price is now £255,500 (latest official figure), for which the “average” buyer completing today will pay £2775 based on the current tiered calculation – zero-rated up to £125k, then 2% on the next £125k and 5% thereafter… and for the same value home a first-time buyer will pay bot-all, as their threshold is £300k.
For an “average” buyer to pay £3548, the purchase price would need to be £270,960.
Had rates stayed the same as those applicable to 1997, the SDLT payable on the “average” house price today would be £2555 – or £2710 to the figure this article seems to be based upon. Do the maths on a million-pound mansionette – what would have cost £10,000 in 1997 (a chunk of money back then…) will now cost ‘yer average’ buyer an eye-watering £43,750 in today’s money.
So clearly the multitudinous amendments made to the rates to where they are today is a major contributory factor to any increase.
But come on – 1997 was a generation ago. things have moved on.
In 1997 an “average” packet of fags was £3.12. Now they are eleven quid (apparently!) A gallon of go-juice was around 65p and it’s currently £1.38. No… hang on… it’s now £1.39 – you should have filled up before I started typing this! These things are everyday costs for a good proportion of the adult population, whereas Stamp Duty is something that the “average” person will pay three or four times in their lives.
But not everything has rocketed, though. Funnily enough, I was charging more in 1997 than any of the onlinies are today. Difference being my vendors got what they were paying for and never complained about the cost.
I wonder how much Benham & Reeves’ “average” fee has increased since 1997 to today’s figure… and why they aren’t submitting an article on that?
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