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Homeowners hit by tax increases
27/01/2006 16:17:00
Changes in the tax system have left householders £10 billion out of pocket.
The Council of Mortgage Lenders (CML) said that a combination of changes since 1993 had left homeowners from being £2.3 billion better off, in tax relief on interest repayments and income support, to handing over £7.3 billion in taxes.
With tax relief abolished, whilst inheritance tax and stamp duty are both up, the CML estimates that Britons are now £10 billion worse off to the tax man – thanks to low thresholds for stamp duty and inheritance tax failing to rise as fast as house prices.
Bob Pannel, CML's head of research, said: "The failure to index thresholds for both inheritance tax and stamp duty means that the tax burden on home-owners has grown significantly in recent years. This sits oddly with the government's stated goal of extending home-ownership to three-quarters of the population.
"One of the iniquities of inheritance tax is that the government is taxing growing numbers of homeowners at 40 per cent when they die even when they have never been higher-rate tax-payers during their lifetime."
The CML claimed that the inheritance tax threshold would be £500,000, compared to its current level of £275,000, if it had risen in line with house prices.
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