17-06-03
Stamp Duty hitting Edinburgh hard – Barrett
John Barrett, Liberal Democrat MP for Edinburgh West, today used his parliamentary debate on the impact of stamp duty in Edinburgh to urge the Treasury's Economic Secretary to urgently reform the house buying tax.
Mr Barrett called on the Minister to increase the threshold at which stamp duty has to be paid and change the way in which areas are chosen for the disadvantaged areas relief.
Up to date figures from the Edinburgh Solicitor's Property Centre show that in 1993, when the £60,000 threshold for paying stamp duty was introduced, only 32% of the properties they sold in Edinburgh were subject to the duty. This year, 92% of properties sold by the ESPC were sold over £60,000, most them subject to stamp duty payment.
The ESPC, along with
National Association of Estate Agents, the Halifax - Bank
of Scotland and the Council of Mortgage
Lenders, have now called for the £60,000 threshold
to be increased substantially.
Speaking during the debate, John Barrett said;
"Edinburgh is now by far and away the most expensive place in Scotland in which to buy property. Recent price increases have had a major impact on the ability of a huge section of people, particularly first time buyers, who are trying to get onto the first rung of the property ladder, to actually buy a house.
"To make matters worse, for most of these people, they are faced with an additional charge in the way of stamp duty because in the City, it is pretty much impossible to find a property for less than £60,000. This is no longer a tax on the wealthy as it was originally intended to be, in Edinburgh, stamp duty has become a basic tax on moving.
"The £250,000 threshold at which 3% duty has to be paid also needs to be raised. When the Chancellor introduced the higher rate three years ago, he promised that only 2% of property sales would be affected. In Edinburgh, this figure now stands at 20%. Ordinary families are now being hit with massive up front costs of £7,500 or more for average properties in the City."
Mr Barrett also called on the Government to reform the disadvantaged areas relief, where properties in selected post code districts, covering deprived areas, do not have to pay stamp duty until the property value reaches £150,000.
He added:
"Although I support this scheme, which has benefited a number of my constituents, the way it operates has thrown up a range of anomalies in Edinburgh.
"Although Muirhouse is included under the scheme, neighbouring Drylaw is not, purely because it is in the same postcode district as Blackhall, Fettes and Craigleith. Worse still, well off parts of Holyrood and the West End are included when worse off parts of Edinburgh are not.
"Although I would like to see stamp duty abolished in the long term, it does raise £3 billion for spending on public services. However, there are number of ways the duty can and should be reformed. The Government would do well to get on with the task."
ENDS
Notes to Editors:
Stamp Duty
-
John Barrett spoke in a 30 minute adjournment debate on "The Impact of Stamp Duty in Edinburgh". John Healey MP, the Economic Secretary to the Treasury replied to the debate.
-
Stamp duty was introduced in 1694 and intended to be a tax on wealthy transactions.
- The threshold for paying stamp duty since 19058 is shown as follows:
| Year | Stamp duty Threshold |
| 1958 | £3,500 |
| 1963 | £4,500 |
| 1967 | £5,500 |
| 1972 | £10,000 |
| 1980 | £20,000 |
| 1982 | £25,000 |
| 1992 | £30,000 |
| 1993 | £60,000 |
-
The current levels for paying stamp duty are:
| Property value up to £60,000 | 0% |
| Between £60,000 and £250,000 | 1% |
| Between £250,000 and £500,000 | 3% |
| Over £500,000 | 4% |
House Prices
-
During the first quarter of 1993, the average price of property sold through ESPC's member solicitors stood at £56,924. The equivalent figure for 2003 was £130,420 - an increase of 129% over the decade.
-
Figures from the Bank of Scotland Report "20 Years of Scottish Housing" show that Edinburgh is the most expensive place in Scotland in which to buy a house. According to the report, the average house price in selected Scottish cities in 2002 (with equivalent house prices in 1988 shown in brackets) are:
| Edinburgh | £132,186 | (£47,301) |
| Stirling | £106,802 | (£47,533) |
| Perth | £95,488 | (£40,531) |
| Aberdeen | £92,426 | (£42,027) |
| Glasgow | £88,243 | (£42,259) |
| Inverness | £87,105 | (£34,155) |
| Dundee | £69,615 | (£34,424) |
Disadvantaged Areas Relief
- The postcode districts in Edinburgh which are included under the disadvantaged areas relief are:
| EH11 3 | Stenhouse |
| EH14 2 | Wester Hailes |
| EH16 4 | Craigmillar |
| EH3 8 | Fountainbridge |
| EH4 4 | Muirhouse |
| EH5 1 | Granton |
| EH6 6 | Leith Harbour |
| EH8 8 | Holyrood |