Housebuilder’s Stamp Duty Incentive
Housebuilder Barratt Development is offering to pay house buyers’ stamp duty for properties worth up to £500,000 in a deal stretching to Christmas. As its profits took a plunge, the housebuilder is hoping to boost the housing market.
Housebuilder Barratt Developments announced its own stamp duty incentive to house buyers as the attempt by the Government to boost the housing market has so far not been met with enthusiasm.
Barratt has offered to pay the stamp duty on the homes it builds and sells for up to £500,000. Houses sold for up to £175,000 have no stamp duty payable since last week’s changes; houses worth up to £250,000 then have stamp duty of 1%; and houses sold for between £250,000 and £500,000 are subject to 3% stamp duty. Therefore, Barratt could be paying up to £15,000 in stamp duty for a property sold at the top of the range.
Last week the Government raised the zero stamp duty threshold from £125,000 to £175,000 in an attempt to boost the housing market, and especially attract first-time buyers on the property ladder. However, response from would-be buyers has been muted so far, and housebuilders have begun to offer their own incentives to get the market moving.
Barratt – who have suffered a 68% loss in profits following the crash in the market – decided to make its own move, and the stamp duty holiday offer will last until Christmas.
Barratt reported its profits to be £137.3m to the 12 months to the end of June. In the previous year profits had been £428.8m. Figures since June have probably been even worse and sales in the weeks since then have been at half the level of 2007. The group wrote off £208.4m of its £3.3bn land bank earlier this year, in anticipation of worsening financial figures.
Mark Clare, chief executive at Barratt, said that the market place was intensely difficult as prices and sales continued to fall. Improvement in trading conditions would only come with improved mortgage finance and customer confidence. Barratt’s stamp duty incentives may help boost the latter by reducing customer financial outlay.
