Stamp Duty has risen at seven times rate of inflation

The average stamp duty paid on buying a home has increased from £532 in 1995/6 to £5957 in 2011/12.

According to the new report by the HomeOwners Alliance “Stamping on Aspiration: the real cost of stamp duty”, stamp duty in London has risen to an average of £17,529.

This equates to home buyers parting with an average of 3.7% of the price of their home to the government.

The government is set to make as much from stamp duty as duty on alcohol and tobacco by 2017/18.

The rate of increase is 4.6 times faster than house prices and 7.1% faster than inflation.

This means average stamp duty is the equivalent of 11 weeks average earnings, up from eight days average earnings in 1995/6.

Paula Higgins, Chief Executive of the HomeOwners Alliance, said: “The housing market is being choked by the rising cost of stamp duty. The overwhelming majority of people want to own their own home, and the government says it wants to help them.

“But the reality is that its home tax is taxing their aspirations to death. With homeownership in historic decline — depriving 5 million people of the dream of owning the roof over their head — the government should not be looking to homebuyers to fill its deficits.”

The HomeOwners Alliance has made a number of recommendations to reform stamp duty, including increasing it on buy-to-let properties and second homes. It also wants thresholds in stamp duty to be raised annually in line with house prices.

To find out more visit the HOA website.

Today's Conveyancer