Lifetime stamp duty bill nears £12,000

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Households will typically pay nearly £12,000 in stamp duty over the course of a lifetime of climbing the housing ladder, according to research.

Lloyds Bank found that the average home owner who has taken three steps on the housing ladder in their lifetime will have spent £11,782 on average just on the 
tax.

As people typically spend just under eight years living in a property, the research assumed that a home owner had bought his or her first property in 1998, the second in 2006 and the third in 2014.

The first property would be a typical starter home which would have sat below the stamp duty threshold, while the second would be a semi-detached house which would have been liable for around £1,898 worth of tax, and the third a detached property, attracting a typical stamp duty bill of £9,884.

The cost of clambering up the property ladder was found to vary hugely across England and Wales, from a typical cost of £3,718 in Wales to a total bill of around £38,048 for someone taking three steps on the housing ladder in London.

The rigid “slab” structure of stamp duty has been strongly criticised, particularly as surging house prices have pushed more homes into higher tax brackets.

Figures from the Office for National statistics revealed this week that the average UK house price has reached a new high of £260,000 after leaping by 9.9 per cent in the space of a year.

Currently, sales of homes are free of stamp duty up to the value of £125,000 and attract a one per cent tax above this level and up to £250,000.

But rising house prices as the housing market gathers pace mean more purchasers face paying at the higher rates of three per cent applied to homes worth over £250,000 to £500,000, four per cent on those valued at over £500,000 up to £1m, five per cent on those over £1m to £2m and seven per cent beyond that point.