Stamp Duty Confusion Slows Housing Market
After the Government’s refusal last week to deny that a stamp duty holiday was being considered, buyers have been pulling out of housing deals in the hope of saving thousands of pounds in tax. The Government has come under fire for the confusion they have caused in an already struggling marketplace.
Amazingly, the discussion last week on the possibility of there being a ‘stamp duty holiday’ has put further brakes onto the housing market.
Buyers, seeing the possibility of saving thousands of pounds, have been pulling out of deals. Why buy now, and pay the extra money to the Government, when you could wait a few months and save all that cash?
The Government has been criticised for muddying the waters at a time when the housing market needs clarity and direction. Last week Chancellor Alistair Darling did not deny reports that the suspension of stamp duty to boost the housing market was being considered. Unfortunately, with those actions, the rumours have had exactly the opposite effect, and have slowed the housing market even more.
Housing Minister Caroline Flint has also come in for criticism after claiming that the housing market always ‘flatlined’ in August. In fact, last year there were 143,000 house sales – a higher figure than in any of the previous six months. Miss Flint said that any announcement about a ‘tax holiday’ was several week away.
Shadow chief secretary to the treasury, Philip Hammond, accused the Government of dithering in a combination of chaos and denial which was damaging the wider economy. Estate agents have been saying that people have been thrown into confusion by the Government’s comments. Some have said that the Government should follow the example in the US where there are tax breaks for first-time buyers.
Treasury officials have tried to reduce the speculation. It said, in a statement, that reports of firm proposals being drafted were ’simply wrong’. However, it did admit that several options were under study.
Conservatives were also calling for the suspension of Home Information Packs to boost the housing market. There is a clause in the law that allows for a suspension of the packs at any time.
