Government plans to scrap stamp duty

Permalink: Government plans to scrap stamp duty
by Kay Murchie

In an effort to kick-start the property market, Chancellor Alistair Darling has confirmed he is considering a possible suspension of stamp duty on house purchases as he warned of difficult times due to the credit crunch.

Family budgets have been under severe pressure following rising mortgage payments, a rise in food and fuel costs and falling house prices has meant that many are on the verge of negative equity.

Mr Darling warned that Britain is experiencing a tough time currently and warned that this is likely to continue for some time.

Speaking on BBC’s Today programme, Mr Darling said the Government is considering a temporary suspension of stamp duty for a pre-Budget report that is scheduled for late October.

According to sources, Darling is examining a range of options to counter the property slowdown and efforts to deal with fuel poverty.

The news will no doubt be welcome for prospective buyers, first-time buyers in particular have struggled to get a foot onto the property ladder due to stamp duty charges and the requirement of huge deposits following the credit crunch.

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.

In addition, Charles Wasdell, director of Moveme.com, said the scrapping of stamp duty will create renewed confidence in the housing market.