Labour rakes in £31bn in stamp duty

Homebuyers have forked out £31.5billion in stamp duty over the past ten years, it was revealed yesterday.

Last year alone, the figure reached £6.5billion - a staggering 675 per cent increase since Labour came to power.

In 1997-1998, just £830million in stamp duty was paid.

Increases introduced by Gordon Brown when he was Chancellor, which were widely criticised at the time, are forcing record numbers of homebuyers to pay stamp duty.

Before Labour came to power, the tax was charged at just one per cent on all properties sold for £60,000 or more.

Today, it is charged at one per cent on houses costing between £125,000 and £250,000, three per cent on those worth from £250,000 to £500,000 and four per cent for those sold for more than £500,000.

A £250,001 house would leave the buyers with a tax bill of £7,500.

In London, the average asking price for a home is £402,000, which would mean stamp duty of more than £12,000.

Accountants Grant Thornton yesterday criticised the tax as "inequitable".

The firm dismissed Labour's claims to have helped first-time buyers by increasing the lower threshold from £60,000 to £125,000.

With an average house price of nearly £200,000, this change to the threshold has made no difference to many.

Last year, 1.1 million paid the tax, nearly 400,000 more than in 1997.

Karen Campbell, head of stamp taxes at Grant Thornton, said: "Stamp duty is impeding millions of potential home owners from jumping on the property ladder."

The majority of first-time buyers are now forced to pay the tax, which - coupled with the recent property boom - makes finding enough money to buy a home even harder.

Last October, the Conservatives pledged to axe stamp duty on all homes sold for less than £250,000.

If the stamp duty threshold had increased in line with house price inflation, stamp duty would not be payable until a home is sold for more than £190,000.

It comes amid calls for a stamp duty "holiday" to prevent the property market seizing up.

A moratorium was introduced by John Major, the then Tory Prime Minister, in 1992 to kick-start the crumbling property market.

Properties worth up to £250,000 were exempted from stamp duty for eight months.

The Royal Institution of Chartered Surveyors and the National Association of Estate Agents have both called for another stamp duty holiday.

A Treasury spokesman said: "As a result of threshold increases made by the Government, five out of six homebuyers pay stamp duty at one per cent or pay none at all."