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Treasury defends stamp duty raises

The Halifax has released a report criticising stamp duty increases which mean that almost a fifth of homebuyers are now paying the tax at a higher rate than they did five years ago. Buyers who purchase properties valued at a minimum of £250,000 must pay a stamp duty rate of at least three per cent. The number of home sales now reaching that rate has risen from 73,403 in 2001 to 279,408 in 2006. The levy brought some £4.6 billion into Treasury coffers in the 2005/06 tax year, with higher rates accounting for 74 per cent of that revenue. Responding to the report, a spokesman for the Treasury said: "As a result of threshold increases made by the chancellor, five out of six homebuyers pay stamp duty at one per cent or pay none at all. "In the 2005 Budget, the chancellor doubled the zero-rate threshold to £120,000, taking 430,000 transactions out of stamp duty entirely. "Last year, the chancellor increased the threshold further to £125,000, exempting an additional 40,000 homebuyers each year from stamp duty."

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