As the government considers the temporary scrapping of stamp duty in the hope of kick-starting the beleaguered property market, there are fears that the uncertainty and confusion over this move will actually plunge the market even further into crisis.
[UKPRwire, Wed Aug 13 2008] As the government considers the temporary scrapping of stamp duty in the hope of kick-starting the beleaguered property market, there are fears that the uncertainty and confusion over this move will actually plunge the market even further into crisis.
The Chancellor, Alistair Darling, has said that he is looking at a range of options which include scrapping stamp duty as part of a wider package aimed at encouraging buyers and stimulating the housing market.
However, since his decision might not come until September or even late October (when he will deliver his pre-Budget report), critics say that in the short-term this delay might have a paralysing effect on the market, as buyers hold off from finalising deals as they wait to see if the levy will be scrapped.
Stamp duty is levied at 1% on homes over £125,000, 3% on those over £250,000 and 4% on those over £500,000.
Property experts welcomed the proposal, while emphasizing that a stamp duty holiday needs to be part of a coordinated raft of measures to help revive the depressed housing market. These would include moves to inject liquidity back into the mortgage market, along with additional steps to help first-time buyers.
Critics of the plan said that lifting stamp duty would be unfair on millions of homeowners who have had to pay it over the past few years, while others are calling for reforms of the levy to make it fairer.
Whatever the view taken of the proposal, there is universal agreement that the government should announce its decision as soon as possible and end the speculation and uncertainty.
“Not knowing which way the government will go regarding the possible suspension of stamp duty may reduce even further the volume of transactions in the property market this summer,” said Lawrence Smith of Decision Homebuyers. “Both buyers and sellers need to be given a clear and early indication, in order for ongoing deals to go ahead and to give a much-needed boost to first-time buyers.”
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