As part of a raft of measures aimed at getting the UK economy back on its feet, Chancellor of the Exchequer, Rishi Sunak, will reportedly reveal plans during his summer statement on Wednesday to increase the Stamp Duty threshold.
At present, the threshold is set at £125k, but this could rise to as much as £500k according to reports.
The new threshold is designed to make it more financially realistic for first-time-buyers to get onto the property ladder.
However, despite the Prime Minister repeatedly stating that he wishes to overhaul the “huge problem” of stamp duty, the new threshold is believed to only be temporary.
Tomer Aboody, director of property lender MT Finance said, “While plans for a stamp duty holiday are a step in the right direction, what has been suggested so far doesn’t go far enough.
“The threshold for higher-end properties – £1m-plus – is still at extraordinarily high levels, which prevent many from selling or buying. While giving a stamp duty holiday at entry-level, why not also reduce the higher-end stamp duty to previous levels where it was a set amount?
“This would allow, even for a short period, for the market to evolve, and for buyers to move up and down the ladder more easily. This, in turn, would stimulate the economy as people move, develop, refurbish, buy furniture – bringing in a lot of business across the board and boosting jobs.
“Many older buyers who would like to downsize would also benefit as they understandably do not want to spend a big chunk of retirement income on stamp duty when selling up and buying something smaller. Overall the Chancellor’s ambition and help throughout this difficult period has been extraordinary. The stamp duty problem is one which has been an issue for a few years now, and it is time to tackle it.
“The UK economy is built on housing – let’s get this moving, which will get the rest moving.”
Luxury Property Buying Agent, Camilla Dell, said, “The anticipated raising of the threshold to £500,000 will benefit first time buyers – but more so in more expensive parts of the country, like London. Any announcement should not delay the change – the change must come in from midnight that day (as per other stamp duty announcements) so as not to put a brake on the market while buyers wait for the change to come in.
Whilst supporting the lower end of the market is helpful, it could also be counter-productive. The £500,000 part of the market is already competitive, and a stamp duty holiday could cause prices to rise, which would be an un-intended consequences. My view is that the Government should look at revising the entire stamp duty regime to kick start the market and get volumes back to normal again, not just the lower end.”