A new campaign exposes where stamp duty is hitting homebuyers the hardest in Somerset.
In 2012-13 just over a fifth of house sales in Mendip (22 per cent) raised 79 per cent of all stamp duty in the district because they fell between £250,000 and £500,000. In Sedgemoor 15 per cent of house sales raised 71 per cent of stamp duty revenue and in South Somerset 21 per cent of sales raised 77 per cent of stamp duty revenue for the same period.
The TaxPayers Alliance "Stamp Out Stamp Duty" campaign calls for a cut in the unpopular tax. If you buy a £250,000 property you pay one per cent, or £2,500. But if you buy one for £250,001, you pay three per cent, or £7,500. This means that buyers are extremely sensitive to differences in prices over these thresholds. Stamp Duty at the three per cent rate can act as a barrier both for an increasing number of first-time buyers, as well as many families wanting to buy a new home.
The campaign reveals that more than a quarter of home-buyers are now getting hit with a Stamp Duty bill for £7,500 or more and calls for a cut in the tax. In the South West, 18,838 homes were bought with a stamp duty rate of three per cent or more in 2012-13. This was 24 per cent of all of the transactions in the region which made up 81 per cent of total stamp duty revenues for the South West.
Matthew Sinclair, chief executive of the TaxPayers' Alliance, said: "Owning your own home is an important milestone, but for many families it seems harder and harder to reach. Ministers have done nothing to ease the burden imposed by stamp duty, which is an unfair double tax that gets in the way of would-be first-time buyers and others thinking about moving.
"Instead they have made things worse with new thresholds and new, higher rates. The Government needs to act on ministers' rhetoric about getting people onto the property ladder and cut this unfair tax."
Both of the latest major reviews of the British tax system, the 2020 Tax Commission from the TaxPayers' Alliance/Institute of Directors and the Mirrlees Review from the Institute for Fiscal Studies, concluded that stamp duty should be abolished.
The TaxPayers' Alliance argues that apart from stopping some people from getting on the property ladder in the first place, stamp duty prevents people from moving when they need to. The result being that people stay put when it would make sense for them to move for a variety of reasons, such as getting a new job, being closer to relatives, or having enough space for a growing family.
The Stamp Out Stamp Duty campaign is urging the Government to ease the burden on home-buyers and potential home-buyers by cutting this tax. Prime Minister David Cameron and Chancellor of the Exchequer George Osborne promised to increase the Stamp Duty threshold in 2007. The TaxPayer's Alliance say "six years later and three years into power it's time that they delivered on that promise".
