The reform of stamp duty land tax was welcomed by the industry but described as “too little, too late” by many commentators.
For one year from 3 September, the threshold for paying stamp duty rises to £175,000 from £125,000.
CML director general Michael Coogan commented: "The stamp duty concession for properties under £175,000 is something of a curate's egg - good in parts. It will reduce transaction costs for some buyers, which is welcome. But we estimate that around half of all housing transactions will still be caught by stamp duty.”
Jim Gillespie, chairman of the
"Furthermore, stamp duty threshold changes need to be permanent, not temporary, as this measure is likely to have its greatest impact towards the end of the 12 months whereas we need the housing market to be kick started right now. The first threshold for stamp duty should have been raised to £250,000 with the higher tiers increasing accordingly.”
movewithus agrees the stamp duty threshold should extend to £250,000. The property specialist is also calling on the Government to introduce a sophisticated stamp duty system based on regional average house prices with entry levels set at different rates to spread the benefits.
Robin King, founder director of movewithus, believes the move could be a catalyst for worsening conditions. It will have a significant impact on the 20 per cent of houses currently valued between £180,000 and £200,000, and King predicts that these properties will experience a major reduction in their value and, in turn, impact on the rest of the market far too quickly.
movewithus believes that the Government needs to focus on increasing liquidity in second hand stock at the bottom of sales chains in order to free more movers and benefit the second hand market, as well as making efforts to assist homebuilders.
Chris Cummings, director general of the Association of Mortgage Intermediaries, said: “The danger of offering such a solution limited to a one-year period remains and risks creating an artificial bubble in house prices. We would have preferred to see an index linked system and a wider review is desperately needed. The current regime looks dated and more modern systems exist in other EU member states, and around the world. We would commend these to the government.”
Another criticism is that the reform will only help a limited number of people. Russell Jervis, managing director of estate agency haart, commented: “Although home buyers outside of
Robert Bartlett, CEO at Chesterton, agreed: “This will have no impact on the
David Bexon, managing director of SmartNewHomes.com, said: “The long-awaited decision on stamp duty falls way short of what homebuyers had been hoping for following rumours of a complete suspension of the tax in recent weeks. The new threshold is a very weak gesture from the Government and will not benefit a significant number of homebuyers. In the new homes market, developers are frequently paying this tax for their customers, and would have welcomed more help from the Government to assist them with this financial burden.”
The Royal Institution of Chartered Surveyors spokesperson James Scott-Lee said: “A one-year stamp duty holiday could provide some much needed relief for first time buyers currently struggling in the current market. However, nine out of 10 of total transactions will be unaffected by the band movement. The move will have little impact in
“At best the relief will save buyers £1,750, a drop in the ocean of the £27,738 RICS estimates as the average upfront costs of buying a home. RICS is pleased that the Government has ended the uncertainty over stamp duty but there should be a complete holiday from stamp duty followed by reform of the slab system to a marginal system similar to income tax.”
David Bryant, group development director for Persimmon Homes, was more upbeat and said: "First time buyers play a crucial role in sustaining the market and the one-year stamp duty holiday will provide some much-needed financial relief for those who are struggling to get onto the property ladder.
"We are pleased the Government has ended the uncertainty over stamp duty reforms however, we would've preferred to have seen a total break from stamp duty and the introduction of additional measures such as a Government savings initiative to help bridge the gap between their savings and the minimum deposit needed for a new home.”
Housebuilder Persimmon Homes has such a scheme in place in conjunction with
Date: 2nd, September, 2008
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