RITAIN’S biggest building society has called on the Government to abolish stamp duty* for first-time buyers on properties costing up to £150,000.
Nationwide building society said nearly 75% of first-time buyers now paid stamp duty, up from just 40% four years ago.
It said people taking their first step on to the property ladder now paid an average of £1,040 in the tax, equivalent to 5.6% of average annual take-home pay.
The society said it would take people a year just to save enough money to pay for their stamp duty if they set aside £85 a month.
It added that it would not be surprising if first-time buyers put down lower deposits in future in order to have enough money to pay their stamp duty, and in some cases they may put down no deposit at all.
Nationwide estimates that revenue from stamp duty has more than trebled during the past four years to £3.6bn in 2002-03, of which first-time buyers contribute around £700m or 19%.
But it claims that exempting first-time buyers from stamp duty up to £150,000 would cost the Inland Revenue only £280m a year.
Alex Bannister, Nationwide’s group economist, said: ‘Stamp duty comes as a significant extra hurdle for first-time buyers already faced with raising a sizeable deposit and rising house prices.
‘Four years ago just 40% of first-time buyers paid stamp duty and of those who did nearly all paid the lowest 1% levy. Now only 25% of first-time buyers purchase properties below the £60,000 threshold at which stamp duty starts.’
Earlier this week Michael Coogan, director of the Council of Mortgage Lenders, called on the Government not to see the housing market as a cash cow and to intervene in the market only if this resulted in lower costs or increased homeownership.
