CALL FOR SUSPENSION OF STAMP DUTY ON PURCHASES UNDER £500K

July 14, 2016 by in category Mortgage News with 0 and 0

In spite of former chancellor George Osborne hiking stamp duty for buy-to-lets and second properties as recently as April with a 3% surcharge, the financial planning expert at Old Mutual Wealth, Rachael Griffin has called on the new chancellor Philip Hammond to suspend stamp duty for purchases under £500k as it could provide much needed stimulus to the market following the uncertainty caused by the EU referendum.
She said: “ With the average house price at £282,000 it could provide the required stimulus for the market during a period of exceptional uncertainty.”
Previously it was done to great effect as it would not be the first time a chancellor had done so – .
“There is a precedent for a Conservative government temporarily suspending stamp duty,Griffin said:. In 1991 chancellor Norman Lamont suspended stamp duty for nine months on all properties worth less than £250,000 in an attempt to stimulate the housing market. This resulted in a jump in new mortgage approvals from about 70,000 to about 90,000. It also came in time to help deliver victory for John Major in the April 1992 general election.
“In the financial year 2014/15 HMRC received £7.5bn from residential stamp duty of which 47% came from properties under £500,000, compared to about 64% in 2006/07.
“Suspending stamp duty for property purchases below £500,000 for nine months would cost the Treasury approximately £2.6bn. The new government may see this as an acceptable price to pay in order to keep the property market ticking over.”

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