There is a stark stamp duty North-South divide as new data shows how few homes in southern England are exempt from the tax.
Just 4 per cent of homes for sale in London are exempt from stamp duty compared to 71 per cent in the North East, Rightmove data shows.
Currently, there is no stamp duty on properties in England with a price tag of up to £250,000 – but your chances of finding one are greatly reduced in southern areas.
The Midlands scores better but it’s northern areas where buyers are most likely to not get a tax bill running into thousands of pounds just for moving home.
Rightmove has revealed the percentage of homes for sale in regions around the country that are exempt from stamp duty (for all buyers)
Stamp duty is charged at rising percentages above certain thresholds. The current £250,000 stamp duty threshold is due to drop to £125,000 next year.
On the portion of the price between £250,000 and £925,000, stamp duty is levied at 5 per cent.
The next £575,000 – the portion from £925,000 to £1.5million – is charged at 10 per cent, with the remaining amount – the portion above £1.5million – charged at 12 per cent.
Tax bills: The percentage of homes for sale ind different regions that would be stamp duty exempt for homebuyers
So for example, if someone buys a typical home for £295,000, the stamp duty take is currently 5 per cent on the £45,000 of the price above the £250,000 threshold – so £2,250.
There are reliefs available, including if the property is a first home. In this scenario, a buyer pays no stamp duty up to £425,000 and 5 per cent on the portion from £425,000 to £625,000. If the price is above £625,000, first-time buyers cannot claim the relief.
Buy-to-let landlords and second home buyers must pay a 3 per cent surcharge on top of the standard stamp duty.
> Stamp duty calculator: How much would you pay to move home
According to the Rightmove data, the South East has 16 per cent of homes available without stamp duty, the East 22 per cent and the South West 25 per cent.
On the flipside, 55 per cent of homes in Yorkshire and the Humber are stamp duty exempt, followed by North West at 51 per cent and Easy Midlands 43 per cent.
It leaves buyers in the most affected areas having to fork out large amounts of money simply to cover the costs of moving – something that has prompted calls for stamp duty to be reformed in the Spring Budget on 6 March .
Unequal burden: Zoopla highlights how much of the stamp duty tax take comes from £500,000-plus homes
| Region | Percentage of homes for sale exempt from stamp duty for all buyers | Percentage of homes for sale exempt from stamp duty for first-time buyers |
|---|---|---|
| East Midlands | 43% | 82% |
| East of England | 22% | 62% |
| London | 4% | 28% |
| North East | 71% | 91% |
| North West | 51% | 82% |
| South East | 16% | 52% |
| South West | 25% | 66% |
| West Midlands | 41% | 79% |
| Yorkshire and The Humber | 55% | 85% |
| Source: Rightmove | ||
The findings from Rightmove also revealed the percentage of available properties for sale exempt from stamp duty for first-time buyers.
Again, the worst affected region was London at 28 per cent while the least affected was also the North East at 91 per cent.
Tim Bannister, of Rightmove, said: ‘Stamp duty is a big barrier to moving, with some who would potentially consider a move likely put off by the hefty stamp duty tax in addition to other moving costs.
Increasing stamp duty thresholds in line with these regional variations would seem a logical first step for stamp duty reform
‘At the very least the Government should be thinking about making the current changes to first-time buyer stamp duty charges permanent, with the higher thresholds introduced in 2022 due to expire next year.
‘However, we think there is an opportunity to go a step further. With such regional variations in property prices, increasing stamp duty thresholds in line with these regional variations would seem a logical first step for stamp duty reform.
‘While longer-term supply measures are also needed, this could be one way to help first-time buyers trying to get onto the ladder in more expensive parts of England.’
Tomer Aboody, of property lender MT Finance, said: ‘Stamp duty reform would be a huge positive for the housing market, giving people the opportunity to get on the ladder or move up it, putting the savings made towards deposits or house renovation.
‘Some assistance for the downsizing market would also be helpful, reducing or removing stamp duty for those moving down the ladder, encouraging older people to sell larger homes. In turn, this would bring more stock to the family homes market, which is crying out for houses.’
There are calls ahead of the Spring Budget on March 6 for stamp duty to be reformed
First-time buyer savings
Zoopla added calls for the current tax relief for first-time buyers to be made permanent.
More than 90 per cent of first-time buyers currently searching for homes on Zoopla would pay no stamp duty today, according to the property website’s Richard Donnell.
In England, 203,300 first-time buyers claimed the first-time buyer relief from stamp duty in 2022/23, with savings of £3,500 per purchase on average – the equivalent of £708million in total, according to Zoopla.
It said 150,000 first-time buyers paid no stamp duty at all, meaning they purchased properties below £425,000.
Meanwhile, 53,000 had to pay partial stamp duty because they purchased a property costing between £425,000 and £625,000, the portion of the property price that carries a 5 per cent stamp duty charge.
