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Rocketing stamp duty hits movers; PERSONAL FINANCE.

Byline: Graeme Brown

SURGING stamp duty costs have helped to push the average expense of moving home in the West Mildands to PS7,672, a report has found.

However, the cost is less than the UK average, at PS8,248, and unsurprisingly significantly less than London, where it is PS20,825, according to the research by Lloyds Bank.

Collectively, UK home owners spent PS6.6 billion on moving home last year, marking a 27 per cent yearon-year increase on 2012 as a result of increased moving costs and growing numbers of house sales as the property market recovers.

Lloyds said rising house prices have pushed more property sales into higher stamp duty brackets. It said stamp duty costs, estate agency fees and legal fees have all grown by around seven per cent over the last year, while surveyors' fees and removal costs have remained broadly unchanged. The average spend on stamp duty and estate agency fees now stands at PS2,001 and PS3,601 respectively, the report found.

The Office for National Statistics (ONS) says house prices have leapt 9.1 per cent year-on-year to a new average high of PS253,000.

Critics of the "slab structure" of stamp duty argue it distorts the market. Sales of homes are free of stamp duty up to the value of PS125,000 and attract a one per cent tax above this level and up to PS250,000.

Rising house prices mean more buyers face paying at the higher rates of three per cent applied to homes worth over PS250,000 to PS500,000, four per cent on those valued at over PS500,000 up to PS1 million, five per cent on those over PS1 million to PS2 million and seven per cent beyond that point.

Stamp duty is imposed on the total value of the property rather than just the portion of the price which is above the threshold. This means families buying a home for between PS250,000 and PS500,000 pay between PS7,500 and PS15,000.

The TaxPayers' Alliance estimates three in 10 homes will have moved up into another stamp duty bracket in five years' time.
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Title Annotation:Business
Publication:The Birmingham Post (England)
Geographic Code:4EUUK
Date:Apr 24, 2014
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