The government’s plans to revive the housing market by issuing a stamp duty
holiday will not help first-time buyers in the capital and the south east,
advisers said as they questioned the detail of the policy.
Chancellor Alistair Darling has announced a suspension on stamp duty for
sales of residential property worth up to £175,000, with an estimated loss in
taxes over the 12-month period of £600m.
According to Chas Roy Chowdhury, head of taxation at the
Association of Chartered
Certified Accountants, the real issue lies in the cap placed on purchases
eligible for the holiday.
‘I question why it chose £175,000. In metropolitan areas, how many houses are
there at that price?’ he said.
Roy Chowdhury said a £250,000 cap would enable more people who wouldn’t
otherwise be able to obtain finance to take advantage of the suspension.
‘I’m not sure why it chose this figure we wanted a broader thrust. A more
holistic approach was needed,’ he said.
Mike Warburton, senior tax partner at Grant Thornton, said the £175,000
purchase cap will capture the majority of first homebuyers: ‘Possibly not in
London, but apart from the major city centres, it won’t be a problem. In the
south east it won’t help much. That’s the problem with stamp duty: it’s not
phased regionally,’ he said.
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