Brown in radical plan to scrap stamp duty in bid to help housing market

[DiamondGeezer]

Gordon Brown is considering scrapping tax duty in a dramatic bid to kickstart the housing market, it was reported today.

The radical plan to temporarily abolish stamp duty is said to be part of a raft of new ideas to help ease the pressure on families feeling the pressure of the credit crunch.

Homebuyers currently pay one per cent stamp duty on homes bought for between £125,001 and £250,000, three per cent between £250,001 and £500,000, and four per cent over £500,000.

This means that for a house worth £251,000, buyers have to pay £7,530 stamp duty on top of all their other expenses such as solicitor’s fees and surveys.

As a result, homebuyers have paid a record-breaking £31.5billion in stamp duty over the last ten years, according to official figures.

The Prime Minister will be presented with the findings of the report when he returns from the Olympic Games closing ceremony at the end of the month, according to the Sun.

Last month it was reported that Treasury was seriously looking at proposals to reform property tax.
It would be wrong to say definitively that nobody is looking at it,' said a Treasury source at the time.

'Ministers and officials are very exercised about the housing market and they are looking at a lot of different measures.'

At the time it was suggested that the Treasury was considering offering stamp duty 'holidays' to first time buyers in a bid to ease the housing market crisis.

Figures last month showed that the Government's stamp duty receipts had been hit hard by the credit crunch.

Last week Nationwide figures showed that house prices were falling at a record rate, while experts predicted that they would fall by around 20 per cent by next year.

Falling house prices are reducing the tax revenue for the Government while the housing slump has meant that fewer houses are changing hands.

The audacious new plan comes as it was revealed that Gordon Brown is also planning to introduce new measures to protect poor families and the elderly from soaring fuel price rises.

In an attempt to reassert his authority the Prime Minister is also to hold an emergency Cabinet meeting outside Westminster when he returns from holiday

In an interview last month the Chancellor hinted that changes to stamp duty were possible.

‘Stamp duty is always a factor when people buy and sell houses but we need to make sure that we support the financial system too,’ he said.

The Tories have pledged to abolish stamp duty for most first-time buyers.

http://www.mailonsunday.co.uk/news/...scrap-stamp-duty-bid-help-housing-market.html

 

[Munkey]

Seems like a knee jerk reaction to the major crisis in the housing market. The question for Gordon is how much public support will it attract and I don't it is that much.

Unless the PM hits the energy companies with huge taxes that can help ease the burden on families I doubt he wins over much support with the housing initiative.

 

[DiamondGeezer]

sounds like the government were advised back last February
http://www.dailymail.co.uk/news/art...freeze-prevent-housing-market-seizing-up.html

Can't see how it will help when the banks are not lending as much these days and they didn't pass on the previous full interest rates cuts

 

[allroad]

cant see it helping when people cant get mortgages anyway !!

 

[Munkey]

Because the banks are starved of liquidity they are not in a position to help out, hence the government having to dip into their own pockets to try and help the crisis.

Personally I don't think that the government should step in and try and help out in such a way, surely they have much better ways of spending our taxes than helping out buyers in a troubled market. I don't think that abolishing the stamp duty would help the market in a significant enough manner to warrant these types of initiatives.

 

[edcase]

Wow, more madness. Its not stamp duty stopping people getting on the property ladder, its the banks! The demand for housing is still there (the market figures are badly skewed due to all the unsold apartments that greedy property developers built). Infact mortgage application rates are pretty much same as ever - its mortgage approvals that are down.

If they do scrap the stamp duty it will only help the "well off" people who can afford to buy expensive properties £250k upwards - not average joe.

edcase

 

[little_pob]

Well it'll probably stagnate further until they announce one way or the other now... With a 'credit crunch' who wants to spend at least an extra £1250, if they won't have to in a few weeks time?

 

[spanna]

I don't see whats "audacious" and "new" about this

When I paid my stamp duty back in '91 they introduced a stamp duty "holiday" and announced it the day I paid mine over !!!

 

[jaffa]

So where exactly do the government recoup the billions per year they will lose out on, they are already skint and robbing us blind, if they can just do away with that amount of money with the stroke of the wand then why not help us out with fuel instead of the miserable 2p tax rise being put on hold, we never actually seen any benefit because it was a future rise.

 

[Firemouth]

i am wondering why, and i am one, house owners think they should be exempt from the taxes of the land. they already get away without paying tax on their capital gains, if they purchase a new house, or invest it in something. they have been winging about it for years, even when they were making a packet on each move.

 

[Munkey]

i am wondering why, and i am one, house owners think they should be exempt from the taxes of the land. they already get away without paying tax on their capital gains, if they purchase a new house, or invest it in something. they have been winging about it for years, even when they were making a packet on each move.

Home owners deserve all the breaks they can get, it's much better than sponging off the state and living for free in council/housing association accommodation.

Home owners do pay capital gains on their second homes though.

 

[bluesboy]

Brown in radical plan to scrap stamp duty in bid to**save his ar*e** lets be honest about this !!!

 

[jaffa]

Brown in radical plan to scrap stamp duty in bid to**save his ar*e** lets be honest about this !!!

Absolutely no doubt about it bluesboy and expect even more gimmicks in the next couple of years leading up to the election.

 

[smirnoff_rules]

the big problem here is he hasnt given a date , this is going to make things worse .. would u get a house now or wait till they scarp the duty ? or would u pull out of buying a house ?

 

[little_pob]

More...

Options 'kept open' on stamp duty
Suggestions that the government has put forward a proposal to let homebuyers delay stamp duty payments are "simply wrong", the Treasury has said.

On Tuesday, Chancellor Alistair Darling failed to rule out changing the tax in order to free up the housing market.

The Tories accused him of playing "short-term games", while estate agents warned of greater "uncertainty".

But the Treasury has said the story was "speculation" and insisted a "number of options" were being looked at.

Currently, people buying properties for between £125,000 and £250,000 pay 1% in stamp duty at the time of sale.

Those spending more than £250,000 pay 3%, while homes worth more than £500,000 incur a 4% rate.

'Incentive'

On Tuesday, Mr Darling refused to be drawn on newspaper reports that stamp duty was to be temporarily scrapped, as part of an economic recovery package being put together by the prime minister.

He told the BBC he was "looking at a number of measures" and had not "concluded exactly what we need to do".

Although we have called for a stamp duty holiday, I wish he hadn't said it

A day later, the shadow Treasury spokesman, Philip Hammond, said floating a stamp duty suspension without confirming it one way or the other had "created a significant incentive for people to delay the purchase of a property in the hope of avoiding the payment of stamp duty on the transaction".

"The uncertainty can only undermine the market further, reducing the volume of transactions when they are already at historic lows," he said.

"Indeed, we now have the worst of both worlds - a potential delay in property transactions, but with no definite proposal on the table."

'Delicate market'

Peter Bolton King, chief executive of the National Association of Estate Agents, said uncertainty over a possible "tax holiday" could hit sales, as buyers put off completing in a bid to avoid the charge.

He added: "This uncertainty is a very, very dangerous thing - just to make a comment without backing it up in what is a very delicate market.

"Although we have called for a stamp duty holiday, I wish he hadn't said it."

But in a statement, the Treasury said: "Recent news stories suggesting the government has put forward a proposal on stamp duty are simply wrong. These stories are based on speculation.

"As has been said on many previous occasions, the government has made clear that there are a number of options we will need to consider to help businesses and people get through what is undoubtedly a difficult time."

The Conservatives temporarily suspended the tax on homes worth less than £250,000 during the 1991 recession.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/uk_politics/7547584.stm
Published: 2008/08/07 14:37:28 GMT
© BBC MMVIII

They still haven't said one way or another; saying no one has come to us with this idea, isn't the same as saying its simply not on the table. Especially when they say they're looking at a 'number of options' without stating what they are!