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Londoners now have to spend more than a year’s income on stamp duty

PUBLISHED: 17:00 01 August 2017

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Property owners in London on an average income pay stamp duty of £40,576 over their lifetime according to Lloyds Bank report

Londoners on average incomes will face paying stamp duty totalling £40,576 over the course of their lifetime according to new figures from Lloyds Bank. Those who bought after 2001 will have paid more than London’s average annual income of £39,400 and 320 per cent more than the average for England and Wales.

Stamp duty is a mandatory tax payable on all homes bought over £125,000. Homes between £250,000 and £925,000 require 5 per cent stamp duty on the price of the house, whilst those up to £1,500,000 pay 10 per cent. Homes over £1,500,000 pay 12 per cent stamp duty land tax.

The average income in Camden is just over £60,000, with average property prices of £830,000. A freehold property at that price point bought today (1 August 2017) would command stamp duty of £31,500.

The national average for England and Wales totals nearly £12,700 on average, totalling £8.2 billion overall last year, 17 per cent or £1.2 billion higher than in 2015. The figures paint quite the reverse of the picture between 2014 and 2015, when stamp duty payments fell £571 million thanks to reforms.

Nine in ten homemovers in England and Wales pay the charge. In London, the number totals 100 per cent of home movers, compared to just 78 per cent in Wales and 72 per cent in the North.

The problem is compounded for first time buyers in the capital, who paid on average £1,537 in March 2001, followed by £10,077 when second stepping in March 2009 and finally £28,963 for their third purchase in March 2017. Over three quarters, or 78 per cent, of first time buyers across the country pay stamp duty, up from just under half in 2001. In London, the figure was 98 per cent in 2001, up to 100 per cent in 2017.

Andrew Mason, Lloyds Bank mortgage products director, commented: “Rising house prices have caused stamp duty payments to continue to increase despite the reforms that came into effect from December 2014. As a result, the £8.3 billion raised in stamp duty in 2016 was more than £2 billion higher than at the peak of the last housing boom in 2007.

“The average home buyer pays £12,693 in stamp duty in total as they move up the housing ladder. This average, however, disguises substantial regional differences with homemovers, with those in Greater London paying over £40,000. Escalating stamp duty payments have contributed to significant increases in moving costs in recent years.”

Stamp duty calculator

Detached house in Hampstead

Average property price: £4,393,978

Stamp Duty payable: £441,027

Semi-detached house in Highgate

Average property price: £1,806,567

Stamp Duty payable: £130,538

Terraced house in Crouch End

Average property price: £982,514

Stamp Duty payable: £42,001

Two bed flat in Muswell Hill

Average property price: £404,795

Stamp Duty payable: £10,239

Buy to let investment flat in Kentish Town

Average property price: £542,854

Stamp Duty payable: £33,428

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