260 million pounds hidden cost of stamp duty

Leading property website Zoopla revealed in a report yesterday that homeowners in the UK are estimated to have lost over £260m in the past two years as a result of the stamp duty 'dead zone'.

The report published in the Mail Online, blames the stamp duty thresholds for effectively forcing vendors to sell their properties for less than they are actually worth.

Estimates made by Zoopla indicate that 37,300 households whose properties sat just above one of those stamp duty thresholds have lost an average of £7,000 each in the last two years as they under-price the property simply to sell.

Currently stamp duty is payable at 1 percent of the purchase price for properties between £125,000 and £250,000, rising to 3 percent up to £500,000 up to a maximum of 7 percent for homes over £2 million.

If you home is sold for £250,000 then your buyer will have to pay £2,500 in stamp duty but as the law stands at the moment if the property sells for £250,001 then the buyer will be landed with a bill for £7,500. 

The 'dead zone' where sellers are trapped just above any of the above stamp duty areas seems to have hit the £250,000 bracket the hardest.

Zoopla's figures speak for themselves with 46,875 property sales between £246,000 and £250,000 in the previous two years compared to just 15,981 sold between £251,000 and £265,000 in the same period.

The report comes just ahead of tomorrow's budget when the Chancellor faces growing pressure to address the stamp duty issue.  Experts believe the tax is responsible for distorting Britain's property market.

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