Mortgages  

Stamp duty data exposes market distortions

Data from property website Zoopla, revealed that sellers had lost a combined £260m by reducing the fair value of their properties since the last changes were made to stamp duty thresholds in April 2012.

Some 37,266 properties had seen their values reduced to avoid paying a higher rate of stamp duty according to the research, with the number of sales in the price bands immediately before a stamp duty threshold significantly higher than the level expected, and the number of sales in the price band immediately after a threshold significantly lower.

The trend was particularly prevalent at the £250,001 to £265,000 level, said Lawrence Hall, head of communications at Zoopla, with average property prices deducted by £7176 to avoid the tax.

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He said the current stamp duty system “distorted the market”, and claimed an alternative, and called for the Treasury to introduce a more graduated tax system.

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Ray Boulger, senior technical manager at London-based John Charcol, said: “The current structure is absurd. The £250,000 and £500,000 threshold levels have not been changed since they were introduced and so fiscal drag has generated a huge amount of extra revenue for the government and cost for purchasers.”