Homebuyers face visits from tax inspectors to check they are not dodging stamp duty under new rules, which came into force yesterday.

Deals where buyers get round paying a higher rate of stamp duty by stumping up an inflated amount for "fixtures and fittings", such as carpets and curtains, are now illegal.

Such dodges enable a seller to cut the price of the house itself, thus escaping higher bands of stamp duty, which do not apply to extras.

A £260,000 house is subject to three per cent stamp duty.

But if a buyer pays £10,001 for fixtures and fittings, the balance drops to £249,999, under the £250,000 threshold at which duty rises from one per cent.

From yesterday, tax inspectors will have powers to check the correct stamp duty has been paid.

It was expected that homes bought for just under £250,000 will be subjected to special scrutiny under the new powers.

The move comes after it was announced that the amount of stamp duty paid by homeowners has more than quadrupled during the past five years, according to the mortgage group the Council of Mortgage Lenders.

The council 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.

Tuesday December 02, 2003