» Stamp duty helps far less than hoped

Drop in costs is not enough for most purchasers

Article Published: 20th November 2009

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The Government had hoped that its stamp duty holiday would help thousands of would be home owners when it suspended payments on the lowest bracket of properties valued up to £175,000. The 1% duty based on the whole of the value of the property meant the government lost out on £173 million instead of a predicted £600 million as forecast.

Illegible homeowners saved on average £1,498 with an extension on the offer lasting until the end of 2009. The extension is expected to benefit a further 37,500 buyers over four months bringing a total saving in that period of £61 million.

Households in London benefited least from the drop in duty as the average home costs £374,000 and only 13 per cent of home buyers were better off, saving themselves a total of £9.4 million. New home buyers in Basildon, Essex, have benefited most by the drop in stamp duty costs as 58 per cent of properties sold in that borough fell in to the lower price bracket.

The Treasury has seen its revenues hit by a drop in property transactions. During 2006/7 the government earned more than £6 billion in home sales and that figure has shrunk to £2 billion in 2009/10.