According to Halifax, the figure underlines the effects of the failure to increase the thresholds for IHT and the higher rates of stamp duty in line with house price inflation over the past decade.

The study shows that the amount of stamp duty revenue raised from sales of properties valued at more than GBP250,000 has risen by 175% from GBP1.2bn in 2000/01 to GBP3.4bn in 2005/06. The majority (80%) of the rise in the total residential stamp duty tax take over the past five years has been due to an increase in the amount raised at the higher 3-4% rates.

Meanwhile, IHT revenue was a record GBP2.1 billion in the first seven months of financial year 2006/07, up GBP175 million (9%) from the same period of 2005/06. At GBP2 billion, the amount of IHT revenue collected so far this financial year is higher than the total IHT revenue collected in the whole of 1999/00.

Last financial year (2005/06) the government collected GBP3.3 billion in inheritance tax revenue and projects GBP3.6 billion in revenue in 2006/07.

The report goes on to point out that the average house price in 97 of the 645 (15%) parliamentary constituencies surveyed is above the 3% stamp duty threshold of GBP250,000. This is more than quadruple the number five years ago, when only 21 constituencies (3%) had an average house price above the threshold then. The typical homebuyer in these towns will be faced with a stamp duty bill of at least GBP7,500. The average house price in 3 constituencies is above the 4% stamp duty threshold of GBP500,000, with the typical homebuyer facing a stamp duty bill of at least GBP20,000.

Halifax estimates that the number of properties in the UK valued at more than the 2006/07 IHT threshold of GBP285,000 now stands at 1.5 million, or 8% of all owner-occupied properties. The study projects this will nearly triple to 4.2 million properties by 2020 if the threshold is only increased in line with retail price inflation.

Halifax is calling on the government to reform IHT and raise the threshold to GBP430,000 to allow for house price inflation over the past 10 years and to make a commitment to link the threshold to house price inflation in the future. The bank estimates that this change would cost the Exchequer approximately GBP1 billion per annum in lost revenue.

The report also calls for an increase in the stamp duty thresholds to take into account rises in house prices since 1997, when the GBP250,000 and GBP500,000 stamp duty thresholds were introduced. This means that the GBP250,000 threshold would now stand at GBP650,000 whilst the GBP500,000 would be GBP1,300,000.

"More and more parts of the country are now being impacted by property related taxes as the thresholds for both inheritance tax and the higher rates of stamp duty have not kept pace with house price inflation," commented Martin Ellis, Chief Economist at Halifax.

He continued:

"Smaller inheritances, reliant mainly on the family home, are more likely to attract a 40% rate of inheritance tax than five years ago, while stamp duty bills of more than GBP7,500 are becoming more common."

"We call on the government to raise the higher stamp duty thresholds and the inheritance tax threshold in line with the increase in house prices over the past decade. We believe the government also should commit to index link all property related tax thresholds to house price inflation in the future."