Homebuyers will pay a heavy price for Chancellor George Osborne's refusal to modernise stamp duty in last week's Autumn Statement.
Rising house prices will push ever more households into the stamp duty net, and earn the Exchequer billions of pounds in extra tax, according to figures published in the Autumn Statement.
The average London property price looks set to hit £513,000 by 2016, up from £434,000 today, according to figures from the Office for National Statistics.
This will push the average home into the 4% stamp duty band, which applies to properties worth between £500,001 and £1 million.
That would increase the typical buyer's tax liability by a whopping 58%, or £7,500, to just over £20,500, according to calculations in The Daily Telegraph.
First-time buyers will pay 18% more stamp duty by 2016, as the average purchase rises from £184,000 today to more than £217,450.
House prices at the bottom of the market are also set to rise rapidly, while the £125,000 stamp duty threshold looks set to stay the same.
With the average property in England set to cost £301,400 by 2016, up from £255,000 today, the average stamp duty charge will rise by £1,390 to £9,040.
In the 2012/13 tax year, the Exchequer will collect £6.9 billion in stamp duty.
That will rise to £12.5 billion by 2015/16 and £17 billion by 2018/19, according to official figures.
This may explain why the Chancellor was so reluctant to tinker with the system.
Comments