Wed, 06 Aug 08
It has been revealed that HM Treasury is reportedly considering plans to temporarily scrap stamp duty, .
According to Sky News, the stamp duty plan is one of a number of proposals put forward to boost the faltering UK economy. Ministers are also reportedly looking at ways of reducing fuel costs.
Apparently the plan is to suspend stamp duty for a limited period on all house purchases. At present this varies from one percent on homes between 125,001 and 250,000 to four percent on properties over 500,000.
Ministers believe stamp duty is putting people off buying new homes and contributing to the decline in the housing market. Details of the scheme will be presented to Mr Brown at the end of the month.
Sky News political correspondent Niall Paterson says it has been under consideration for some time. 'Private conversations with the Treasury some time ago led me to believe that there could be a scrapping of the 1% rate for property valued at less than 250, 000,' he writes in his blog.
'This morning they've confirmed that they are indeed considering a stamp duty 'holiday'... but that the plans remain firmly on the drawing board.' Paterson says other options have also been discussed, including special ISAs for first time buyers.
Chancellor Alistair Darling has indicated stamp duty could well be suspended for a while. Questioned about the possibility, he said: 'I am looking at a number of measures. It is helping people that is important. I want to look at a range of options that will help people.'
Peter Bolton King, Chief Executive of The National Association of Estate Agents (NAEA), was encouraged by this latest turn of events. He said: 'Today's indication that the government is looking to suspend stamp duty is very encouraging.
'As an association we have been urging the government for some time to address the current situation facing the housing market by calling for measures such as stamp duty holiday.
'Therefore, it is great to see that the government has realised that the current circumstances facing the housing market are not going to simply disappear.
'Drastic action is needed in order to get the cogs whirring in the market place again. If this suspension does occur then it will provide a much needed boost to consumer confidence.
He continued: 'However, whilst this indication that the government may scrap stamp duty is positive, clear and immediate decisions in this area need to be made.
'Decisive action is needed today; one concern is that the anticipation of the suspension of stamp duty may halt the transactions in the housing market even further until the decision is finalised either way.
'Finally, although we welcome this news today we continue to appeal to the Treasury to carry out a complete overhaul of stamp duty.'
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