Housing plan fails to bolster recovery hopes

Gordon Brown

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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