Stamp duty and inheritance tax have soared.
Increasing house prices signify the amount of money Britons give to the government in stamp duty and inheritance tax soaring in recent years.
Halifax calculations highlight that homeowners have paid £6.7 bn in taxes in the previous financial year.
Since they were introduced in 1997 3% and 4% stamp duty bands, that affect homes worth £250,000 and £500,000 respectively, have not gone up. At the same time house prices have increased 162%.
Moreover, the lower threshold of stamp duty has only risen twice since 1993.
Inheritance tax thresholds have gone up consistently. They have not gone up as fast as house prices, with 72% more households forking out for the tax presently than five years ago.
Many parts of the country are impacted by property related taxes due to inheritance tax and some stamp duty thresholds not keeping apace with house price inflation.
Not so sizeable inheritances are likely to attract a 40% rate of inheritance tax compared to five years ago, with stamp duty of £7,500 plus being more common now.
Home buyers are paying £7,500 plus stamp duty in 97 parliamentary constituencies, nearly a tenth of constituencies. This figure is four times that of five years ago.
Inheritance tax is charged at 40% of all assets above its threshold. It is also recording spectacular revenues. Forecasts show £3.6 bn is going to be collected through the tax this year - more than 75 per cent higher than in 2000.
The inheritance tax threshold needs to rise from £285,000 to £430,000 in order to allow for house price inflation in the previous ten years.
Should the higher stamp duty thresholds have risen in line with house price inflation since July 1997 the £250,000 threshold would stand at £650,000 and the £500,000 threshold would be £1,300,000.
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Stamp Duty and Inheritance Tax Soar
Wed, 06 Dec 2006
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