Stamp Duty Decision Maybe Slowing House Sales
Reports that the government is considering changes to stamp duty are causing disarray and delays in the housing market, the BBC has learned.
Among potential measures to boost the housing market could be allowing buyers to defer the payment of stamp duty.
But readers of the BBC News website said that the uncertainty had caused problems for their transactions.
The government has denied that any proposals have been put forward at all, saying the stories are conjecture.
‘Backfired’
After having his property on the market for several months, Richard Bell was due to exchange contracts on his Windsor home on Friday.
But after reports appeared in the media of a possible stamp duty holiday, his buyer has asked to delay completion until the stamp duty situation is clarified.
He is angry at the way the government has handled the situation.
“Their crumb of comfort has backfired,” Mr Bell told BBC News. “It has stopped the sale in its tracks.”
“They really haven’t thought about the implications,” he said.
‘Killed off’
Chris O’Brien from Swansea said he thought the speculation would “kill-off” the housing market until the details of any changes were confirmed.
The stamp duty on the home he is due to exchange contracts on will be more than £8,000.
But he won’t now be signing on the dotted line until the government makes a decision one way or another.
“I don’t want to sign one day only to find that stamp duty has been abolished the next.
“The Chancellor needs to make a swift decision,” he said.
Going ahead
Mark Phillp and his fiance thought about delaying their home purchase until the situation was clearer.
They agreed to go ahead, but it was a difficult decision.
“We really didn’t know what to do,” Mr Phillp told BBC News.
“Do we hold off and risk losing the house or go for it and risk losing the £8,000 in stamp duty?”
They are now hoping that any announcement comes in the next fortnight before they exchange contracts.
The Conservatives have written to the Chancellor calling for an end to such doubt.
However a Treasury representative insisted that no decisions have been taken on changes to stamp duty.
“Recent news stories suggesting the government has put forward a proposal on stamp duty are simply wrong. These stories are based on speculation,” he said.
‘Clarity’
Estate Agents have been echoing the call from homebuyers and politicians for further information.
Peter Rollings, managing director of London-based Marsh and Parsons estate agents, said any further information would be helpful.
He said four househunters who came into one of their West London branches had told him they would hold off putting in any offers while the uncertainty persists.
“What we really need is some clarity,” Mr Rollings said.
He called on the government to at least confirm which price bracket any measures would apply to, in order to prevent the uncertainty infecting the whole market.
What is not clear yet is whether any ease of the stamp duty rules would apply just to the 1% band or to the higher rate bands as well.
Currently, people buying properties for between £125,000 and £250,000 pay 1% in stamp duty at the time of sale.
Those spending more than £250,000 pay 3%, while homes costing more than £500,000 incur a 4% rate.
There is a precedent for a suspension as the Conservatives temporarily suspended the tax on homes worth less than £250,000 during the 1991 recession.
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