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Property taxes on the rise 
More people than ever before are being hit by a combination of expensive property taxes, according to a recent report.
Research by Halifax revealed that inheritance tax and the higher rates of stamp duty on homes contributed a record £6.7bn to the Treasury in the last financial year. The bank said the amount the government collected through stamp duty on properties valued above £250,000 had risen by 175 per cent in the past five years. In the last financial year, government coffers were boosted by £3.4bn from the higher rates of stamp duty, compared with £1.2 billion in 2000-01. Analysis showed that the average house price in 97 of the 645 parliamentary constituencies surveyed was more than £250,000, the level at which the higher rate of 3 per cent stamp duty kicks in. According to the lender, the government is also taking an increasing slice of revenue through inheritance tax (IHT). In the first seven months of the 2006-07 financial year IHT revenue was a record £2.1bn, up 9 per cent on the same period for 2005-06. The government collected a total of £3.3bn in IHT revenue in 2005-06, and the figure is expected to rise to £3.6bn in 2006-07. Halifax estimated that the number of properties in the UK valued higher than the 2006-07 IHT threshold of £285,000 now stands at 1.5m, 8 per cent of all owner-occupied properties. This figure could nearly triple to 4.2m properties by 2020 if the threshold is only increased in line with retail price inflation, the lender warned. More and more parts of the country are now being impacted by property-related taxes as the thresholds for both inheritance tax and the higher rates of stamp duty have not kept pace with house price inflation. Smaller inheritances, reliant mainly on the family home, are more likely to attract a 40 per cent rate of inheritance tax than five years ago, while stamp duty bills of more than £7,500 are becoming more common. If you require any further information about the services that we provide or would like to review your financial planning position, please contact us |