Chancellor ponders stamp duty suspension

Chancellor ponders stamp duty suspension

A long-awaited and much petitioned for concession on stamp duty could be in the offing.

Speaking on Radio 4′s Today programme, Chancellor of the Exchequer Alistair Darling has said that he will include a possible suspension of the tax among a range of measures he is considering to kick-start the UK’s housing market.

However, firm details should not be expected before the autumn, when the Government will be revealing an economic recovery plan.

The Council of Mortgage lenders and other professional bodies have been pressing for a reduction in stamp duty since the onset of the housing market slowdown, because it would encourage first-time buyers to enter the market.

However, Government action to free up mortgage lending is of equal importance because stamp duty is only one challenge faced by those buying their first homes.

They also need substantial deposits because the credit crisis has left lenders reserving their best deals for those with 25% to put down, and loan-to-value ratios of over 90% have all but disappeared.

Stamp duty is currently charged at 1% on homes costing £125,001 to £250,000; 3% on properties between £250,001 and £500,000 and 4% over £500,000.

Homebuyers in south of the country are hardest hit, paying almost five times more than those in the north.

The bill for the average house purchase in the London area is over £12,000.

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