Tax alert: Coventry Building Society issues stamp duty warning as 'buying a home will become more expensive'
More Britons could end up paying stamp duty in the years to come
GETTY
Coventry Building Society has issued a stamp duty warning to millions of Britons as "buying a home will become a lot more expensive" within the next 12 months.
The high street lender is sounding the alarm after published figures from HM Revenue and Customs (HMRC) revealed that homebuyers paid £1billion in the tax during the month of May.
What is stamp duty?
Stamp duty is charged on taxpayers once they buy residential properties costing more than £250,000, unless they are eligible for first-time buyers relief.
If they are an eligible for first-time homebuyer support, they will pay not stamp duty on homes costing up to £425,000 and a discounted rate on property purchases of up to £625,000.
The tax's rate is charged at five per cent on properties priced between £250,000 and £925,000, with those costing between this amount and £1,500,000 getting hit with a 10 per cent levy.
At its highest rate, stamp duty is charged at 12 per cent for residential properties worth more than £1,500,000.
Do you have a money story you’d like to share? Get in touch by emailing money@gbnews.uk.
Stamp duty has been slammed as a "barrier" taxGETTYFor this tax year, homebuyers in the UK have paid £4.4billion in stamp duty which is the the same amount those purchasing property paid during the same period in 2023.
However, a coming change to the existing tax thresholds mean many households could find themselves paying more to HM Revenue and Customs (HMRC) in the months ahead.
In March 2025, the threshold for paying stamp duty will plummet from £250,000 to £125,000.
As a result, this will see the tax bill on an average-priced home in England fall from £2,411 to £4,911.
Furthermore, first-time homebuyers will see their threshold slip from £425,000 to £300,000 in March 2025.
Jonathan Stinton, the head of Mortgage Relations at Coventry Building Society, noted that both Labour and the Conservative Party have not made big promises when it comes to the levy ahead of the coming General Election.
He explained: “Stamp Duty isn’t in all the party manifestos but it’s certainly going to be near the top of the to-do list for whoever is Chancellor on July 4.
“In a matter of months, the temporary thresholds will expire and buying a home will become a lot more expensive.
"As it stands, someone buying an average-priced home in England next April will have to fork out an extra £2,500 to the taxman.
“The ideal opportunity to act will be at the next Budget, which will likely be in September.
LATEST DEVELOPMENTS:
The Bank of England base rate has held interest rates at a 16-year high since it was hiked to 5.25 per cent last August GB NEWS"Leaving it any longer than that will ratchet up the uncertainty and could distort the housing market as buyers and sellers seek to beat the deadline in March.”
Homebuyers have been priced out on the property market in the wake of soaring prices on homes.
Furthermore, homeowners have been forced to pay hiked repayments over the past two years.
This has been a direct consequence of the Bank of England's decision to raise and hold the base rate at 5.25 per cent.