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Stamp Duty

Comment 2nd July 2010

A property costing £250,000 attracts 1% stamp duty at £2,500. A buyer of a property for £250,001 pays 3% on the whole sum £7500.03. A £1 addition to the price attracts an extra £5,000.03 in tax. That is a phenominal rate of taxation. Why isn't stamp duty taxed in bands so that it is 1% up to £250,000 and 3% on the amount over £250,000?

This is the way income tax works and there would be an outcry if income tax was treated like stamp duty. This would mean some earning £43,875 p.a. would pay 20% tax on the amount over the personal allowance but someone earning £1 p.a. more would pay 40% on all their taxable income. If it's unfair for income tax why is it not unfair for stamp duty?   

Why does this matter?

Taxation must be fair and consistent

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