More homes in stamp duty bracket

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/5415518.stm

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One in five homes in Scotland will cost more than a quarter of a million pounds by 2011, according to new research.

The Bank of Scotland says the number of properties in this price bracket will at least double in the next five years.

The change means more home buyers will have to pay increased stamp duty charges.

The bank says higher thresholds for the tax have remained unchanged for nine years while average house prices have risen by 107% over that period.

Currently, about 130,000 homes - some 7% of properties in Scotland - are thought to be worth more than £250,000.

But with house prices rising at an average of 5% a year, it is predicted the number will rise to 320,000 - or 18% of the country's homes.

People buying a house worth £250,000 or more must pay 3% of its value in stamp duty charges.

House price inflation

Five years ago just 1% of properties were valued at £250,000.

In Edinburgh, 17% of sales are of homes worth more than that figure.

In Dalkeith, Midlothian, the figure is 16%, while in Ayr, Aberdeen and Helensburgh 12% of sales attract the higher rate of stamp duty.

Tim Crawford, group economist for the Bank of Scotland, called for the UK Government to link stamp duty thresholds to house price inflation.

He said: "Paying the higher rates of stamp duty is not as widespread a concern in Scotland as it is south of the border, where the average home buyer in one in six towns in England is now facing a stamp duty bill of more than £7,500.

"However, it is likely to become more of an issue unless the government commits to increase the higher stamp duty thresholds in line with the increase in Scottish house prices since 1997."