Stamp duty holidays for first-time buyers being considered
Posted by hasnain on 13 July, 2008
The Government is considering cutting stamp duty in a bid to kick-start the property market.
The UK property market is in danger of grinding to a halt with prices falling at the fastest rate since records began over 50 years ago. Furthermore, mortgages are becoming harder to obtain.
In addition, over the last 12 months, the number of homes being sold by estate agents has halved as some economists are predicting further price falls.
A recent meeting between housing minister, Caroline Flint, and experts from the Royal Institution of Chartered Surveyors, took place where plans for reforming stamp duty were discussed.
The Minister explained that like all other taxes, stamp duty rates and thresholds, are kept under on-going review as part of the Budget process.
Reducing stamp duty or offering stamp duty holidays to first-time buyers is being considered. Furthermore, increasing the price bands at which stamp duty is charged is another option.
Ten years ago, stamp duty was charged at 1% on all properties purchased for £60,000 and over.
However, it is currently charged at 1% on homes bought for £125,001 to £250,000; 3% between £250,001 and £500,000, and 4% over £500,000.
Official figures show that over the last 10 years, a whopping £31.5 billion has been paid by homebuyers.
According to many experts, stamp duty is one of the major factors that is discouraging buyers from the market.
However, according to Ministers, changes to stamp duty would only make a difference if they were accompanied by further efforts to increase the supply of mortgages.
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