Published: February 14, 2012
90% First Time Buyers have Not Paid Stamp Duty
Half of FTBs have Benefited from Stamp Duty Holiday
With just over a month until the end of the Government's stamp duty holiday (24th March), new analysis from HSBC reveals nine in ten first-time buyers have not had to pay the housing tax over the past two years.
Stamp Duty Holiday
Of the 331,899 first-time buyer loans taken out between the start of the stamp duty holiday on 24th March 2010 and the end of 2011, 89% were for properties priced under GBP 250,000. Over this period, 286,299 first-time buyers bought a stamp duty free property, with 159,872 benefitting from the stamp duty holiday by buying their first home priced between GBP 125-250,000. This is half (50%) of all of those first-time buyers who bought a home over the past two years who would otherwise have been liable to pay the additional tax.
FTB Property Purchases April 2010-December 2011
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Property Price Number of transactions
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Under GBP 125K 126,427
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GBP 125-175K 90,027
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GBP 175-250K 69,845
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GBP 250-500K 30,026
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GBP 500K+ 5,574
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TOTAL 321,899
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Source: CML February 2012
FTB Property Prices
Average first-time buyer property prices are under the normal stamp duty threshold of GBP 125,000 in eight of the 12 UK regions, meaning that the majority of FTBs across the UK are still able to buy a home without having to pay the additional tax. First-time buyer house prices are lowest in the North East (GBP 100,112) and highest in London (GBP 268,454).
Average FTB house prices by region
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Region Average FTB house price
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North East GBP 100,112
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Northern Ireland GBP 104,203
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Yorkshire & Humberside GBP 110,036
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Wales GBP 112,157
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North West GBP 112,411
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East Midlands GBP 115,275
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West Midlands GBP 121,324
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South West GBP 152,058
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East of England GBP 161,482
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South East GBP 182,398
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London GBP 268,454
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United Kingdom GBP 153,755
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Source: DCLG, Q3 2011
Peter Dockar, Head of Mortgages at HSBC commented: "We have seen a 20 per cent increase in approvals for first-time buyer loans in the first six weeks of the year as they rush to take advantage of the stamp duty holiday.
"With the deadline fast approaching, we will continue to offer a helping hand to first-time buyers. As well as offering a number of competitive deals for customers with as little as 10% deposit, we have also committed to making GBP 3 billion available to first-time buyers in 2012 whilst also offering a number of fee-free mortgages to help keep upfront costs down."
Fast Facts on Stamp Duty - Tax Year 2010-11
-- HMRC received GBP 4 billion on residential property transactions in
stamp duty land tax in the tax year 2010-11.
-- This was GBP 2.6 billion or 40% less than the peak in 2007-08 (GBP 6.7
billion) but GBP 1 billion or 37% higher than the recent trough of GBP 3
billion in 2008-09.
-- The amount of stamp duty (SDLT) revenue generated by properties under
GBP 250,000 has halved since 2002 to just over half a billion.
-- London yielded the highest amount of stamp duty in 2010-11, worth GBP
1.4 billion in revenue.
-- Prime London councils Westminster (GBP 229 million) and Kensington and
Chelsea (GBP 219 million) yielded the most stamp duty in the UK.
-- Outside of the capital, the South yielded the highest stamp duty
revenue, with Elmbridge in Surrey yielding GBP 51 million alone.
Table 1: HMRC Residential SDLT receipts 2002-2011
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Tax Year SDLT
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2002-03 GBP 3.5bn
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2003-04 GBP 3.7bn
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2004-05 GBP 4.6bn
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2005-06 GBP 4.6bn
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2006-07 GBP 6.4bn
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2007-08 GBP 6.7bn
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2008-09 GBP 2.95bn
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2009-10 GBP 3.3bn
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2010-11 GBP 4bn
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Table 2: HMRC Residential SDLT receipts by tax band
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Tax Year Under GBP 250K(i) GBP 250-500K GBP 500K+
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2002-03 860
GBP 1.4bn GBP 1.3bn GBP million
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2003-04 GBP 1.3bn GBP 1.4bn GBP 1bn
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2004-05 GBP 1.4bn GBP 1.8bn GBP 1.5bn
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2005-06 GBP 1.2bn GBP 1.9bn GBP 1.5bn
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2006-07 GBP 1.5bn GBP 2.7bn GBP 2.3bn
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2007-08 GBP 1.3bn GBP 2.7bn GBP 2.7bn
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2008-09 505
GBP million GBP 1.2bn GBP 1.3bn
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2009-10 450
GBP million GBP 1.4bn GBP 1.5bn
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2010-11 540
GBP million GBP 1.6bn GBP 1.9bn
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Table 3: Residential Stamp duty by Government Region 2010-11
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Value of
transactions
Region No. transactions (million) SDLT (million)
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London 108,760 GBP 48,860 GBP 1,345
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South East 153,465 GBP 42,835 GBP 955
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East of England 98,215 GBP 22,895 GBP 430
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South West 95,235 GBP 25,510 GBP 400
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North West 78,575 GBP 12,935 GBP 175
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West Midlands 66,650 GBP 11,925 GBP 175
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Scotland 73,740 GBP 12,025 GBP 165
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East Midlands 64,195 GBP 10,650 GBP 135
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Yorkshire &
Humberside 63,200 GBP 10,125 GBP 130
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Wales 33,365 GBP 5,305 GBP 65
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North East 27,100 GBP 4,240 GBP 45
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Northern Ireland 14,185 GBP 2,060 GBP 20
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United Kingdom 876,685 GBP 205,365 GBP 4,040
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Top 10 highest yielding local authorities in London 2010-11
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Local Authority SDLT
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1. Westminster GBP 229 million
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2. Kensington & Chelsea GBP 219 million
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3. Wandsworth GBP 90 million
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4. Camden GBP 76 million
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5. Barnet GBP 69 million
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6. Richmond upon Thames GBP 65 million
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7. Hammersmith GBP 63 million
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8. Bromley GBP 41 million
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9. Kingston upon Thames GBP 32 million
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10. Southwark GBP 30 million
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Top 10 highest yielding local authorities in 2010-11 (excl London)
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Local Authority SDLT
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1. Elmbridge GBP 51 million
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2. Wiltshire UA GBP 40 million
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3. Cornwall UA GBP 39 million
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4. St Albans GBP 33 million
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5. Waverley GBP 30 million
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6. Windsor & Maidenhead UA GBP 30 million
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7. Brighton & Hove UA GBP 29 million
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8. Guildford GBP 27 million
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9. Reigate & Banstead GBP 26 million
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10. Wealden GBP 24 million
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Note to Editors
(i)Differing thresholds for properties under GBP 125,000 listed in history
of stamp duty below.
Property SDLT rates and thresholds 2011/2012
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Purchase price SDLT rate SDLT rate for FTBs
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Up to GBP 125,000 Zero Zero
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Over GBP 125,000 to GBP
250,000 1% Zero
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Over GBP 250,000 to GBP
500,000 3% 3%
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Over GBP 500,000 to GBP 1
million 4% 4%
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Over GBP 1 million 5% 5%
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History of Stamp Duty
-- From 20th December 1991 to 20th August 1992, the Chancellor announced a
"stamp duty holiday" which exempted all property sales of less than GBP
250,000 from stamp duty.
-- On 20th August 1992, stamp duty was once again charged at 1% on property
sales exceeding GBP 30,000.
-- In March 1993, the threshold was raised from GBP 30,000 to GBP 60,000
for exemption from the paying of stamp duty of 1%.
-- In July 1997, stamp duty increased to 1.5% on properties between GBP
250,000 and GBP 500,000. Over GBP 500,000 increased
-- In March 1998, stamp duty increased to 2% on properties between GBP
250,000 and GBP 500,000. Over GBP 500,000 increased to 3%.
-- In March 1999, stamp duty increased to 2.5% on properties between GBP
250,000 and GBP 500,000. Over GBP 500,000 increased to 3.5%
-- In March 2000, stamp duty increased to 3.0% on properties between GBP
250,000 and GBP 500,000. Over GBP 500,000 increased to 4%.
-- On 30th November 2001, stamp duty was abolished for all property
transactions up to GBP 150,000 in nearly 2,000 disadvantaged areas
across the UK.
-- On 16th March 2005 the stamp duty threshold was raised from GBP 60,000
to GBP 120,000 other thresholds maintained.
-- On 22nd March 2006 the stamp duty threshold was raised from GBP 120,000
to GBP 125,000, other thresholds maintained.
-- On 2nd September 2008 the stamp duty threshold was raised from GBP
125,000 to GBP 175,000 for 1 year, other thresholds maintained.
-- On 22nd April 2009 stamp duty holiday (GBP 125,000 to GBP 175,000),
extended to 31st December 2009.
-- On 25th March 2010 stamp duty threshold for FTB's raised from GBP
125,000 to GBP 250,000 for 2 years (until 24th March 2012).
-- On 5th April 2011 stamp duty on residential property sales over GBP 1m
increased from 4% to 5%.
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HSBC Bank plc: HSBC serves 16.1 million customers in the UK and employs approximately 52,000 people. In the UK, HSBC offers a complete range of personal, premier and private banking services including bank accounts and mortgages. It also provides commercial banking for small to medium businesses and corporate and institutional banking services. HSBC Bank plc is a wholly owned subsidiary of HSBC Holdings plc.
The HSBC Group: HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in over 80 countries and territories in Europe, the Asia-Pacific region, North and Latin America, and the Middle East and Africa. With assets of US$2,716bn at 30 September 2011, HSBC is one of the world's largest banking and financial services organisations.
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