The amount of stamp duty paid by homeowners has more than quadrupled during the past five years, a mortgage group claims.

The Council of Mortgage Lenders (CML) said homeowners now paid £3.5 billion a year in the tax.

It said the Government's decision not to raise the £60,000 threshold on which stamp duty is charged since it came to power meant an extra 138,000 homebuyers would be liable for the tax this year.

It added that the failure of successive governments to raise the threshold for more than a decade also meant increasing numbers of first-time buyers were being caught by the tax.

The CML is calling on the Government to increase the threshold of both stamp duty and the level at which inheritance tax is paid automatically in line with house price inflation.

It also wants it to reform the so-called slab system, under which stamp duty is charged at 1 per cent on properties costing up to £250,000, but rises to 3 per cent for homes sold for up to £500,000 and 4 per cent for £500,000 plus, as it claimed this could distort the housing market.

Instead it said the higher level of tax should only be levied on the amount of the property's price which was above the threshold.

Peter Williams, deputy director of the CML, said: "The time has come to cap the financial burden on homeowners."

Friday October 31, 2003