Stamp Duty payments increased by 17% in 2016

 
Stamp Duty payments increased by 17% in 2016 [Photo: designer491 via iStock]

The amount of Stamp Duty paid by those buying homes in England and Wales increased markedly in 2016, reversing the trend of decline that was recorded between 2014 and 2015. 

According to the findings of a study by Lloyds Bank, the total spent on Stamp Duty for the whole of 2016 was £8.3 billion. This was compared to the £7.1 billion that was spent on the tax in 2015, meaning there was a rise of some 17 per cent in the space of just one year. 

The reasons for this rise include the fact that more homes were sold for higher than the Stamp Duty threshold in 2016, as well as the fact that the government changed the rules on housing tax for buy-to-let homes, which saw landlords pay a three per cent levy whenever they were buying property. 

The research from Lloyds Bank also shows that there has been a rise in the number of young people who pay Stamp Duty when they are buying their first home. Traditionally, these properties cost too little to be charged Stamp Duty, but in the last few years this has not been the case. As a result, Lloyds said as many as 78 per cent of newcomers to the market paid Stamp Duty last year. 

It marked a real rise when compared to the start of the century, when only as many as 47 per cent were paying the property tax. 

This rate rises even further when it comes to London, however, where 100 per cent of buyers getting onto the ladder for the first time will be forced to pay Stamp Duty thanks to the price of the property. 

"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," said Andrew Mason, Lloyds Bank mortgage products director.