More than half a million homebuyers would be exempted from stamp duty every year under proposals launched by the Conservative party on 21 April.

If elected, the Tories will raise the stamp duty threshold from 拢120,000 to 拢250,000. Party leader Michael Howard said this would particularly benefit first-time buyers and free the average home from the tax.

The Conservatives estimate that the policy, the final instalment of the party鈥檚 拢4bn of tax cuts, would cost the Treasury 拢1bn.

However Adam Sampson, director of housing charity Shelter, dubbed the plan 鈥淩obin Hood in reverse鈥�. He said: 鈥淏y increasing the stamp duty threshold, the Conservatives are raiding the public purse to promote private homeownership rather than using the money to increase the supply of affordable housing.鈥�

He also warned that a policy of making houses cheaper by cutting stamp duty could backfire and push house prices higher instead. He said: 鈥淎ny relief for home buyers is likely to be shortlived because the investment will be swallowed up by house price inflation.鈥�

However Graeme Moran, director of Metropolitan Home Ownership, did not think the policy would overheat the market. He said it could act as a 鈥渕ajor stimulus鈥� for first-time buyers, adding: 鈥淚t might stimulate housebuilders to bring forward the homes they鈥檙e developing at the moment.鈥�

At the moment, 1% stamp duty is paid on properties worth between 拢120,000 and 拢250,000. The Royal Institution of Chartered Surveyors, like the Liberal Democrats, has asked for the threshold to be raised to 拢150,000 to help first-time buyers.

Source

Housing Today