Time to extend Stamp Duty relief?
Last September, the Chancellor announced a one-year hike in the stamp duty land tax threshold (to 2 September 2009), so that flats and houses up to £175,000 would be exempt from the usual 1% charge. The normal threshold is £125,000. Since then, sales volumes have plummeted; the Land Registry reported that the average monthly sales in September-December 2008 were 38,830 - down from over 95,000 in the previous year.
It is clear that the timing of the tax incentive wasn't right. We hope that the Chancellor will announce in the Budget that the £175,000 threshold will remain in place for at least another year - and preferably longer.
The value of the increase will depend on which part of the country buyers are looking. The Land Registry reports that the average house price is less than £175,000 in all parts of England & Wales - apart from the South East (£190,000) and London itself (£298,000).
In a new era where lenders want sizeable deposits from buyers, the stamp duty saving of up to £1,750 is important.
