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Friday, 19 December 2014

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Proposed stamp duty holiday no boost say agents

The political party conference season has brought new ideas on ways to stimulate the housing market – but they have received a lukewarm response from local estate agents.

The latest announcement, made this week by shadow chancellor Ed Balls, is that a future Labour government would offer a stamp duty holiday to first-time buyers buying a house of up to £250,000.

Currently buyers pay no stamp duty on homes bought for less than £125,000 but are charged one per cent tax on properties costing between £125,000 and £250,000 – potentially adding £2,500 to their house purchase bill.

But Adrian Hogarth, director of Cumbrian Properties, believes such a change would have a minimal impact locally–as the houses targeted by Cumbrian first-time buyers are well below that level.

“Realistically, most first-time buyers here won’t be paying more than £125,000,” he said.

Nick Elgey, managing director of Cumberland Estate Agents, agrees that few Cumbrian first-time buyers would be buying above £125,000. What would help the local market, he says, would be to offer that tax-break to all buyers.

“There have been stamp duty holidays before that have always produced a spike in the market. It would have a greater benefit if it wasn’t restricted to first-time buyers.”

However Mr Hogarth doubts whether it would make a difference. “People accept that they have to pay stamp duty, just as they accept they have to pay VAT. They aren’t going to rush out and change their homes just because of it.

“If the Government cut stamp duty they would have to make up the shortfall in other ways, with more taxes on roads, petrol, cigarettes or alcohol. It would be robbing Peter to pay Paul.”

Mr Hogarth was more positive about Nick Clegg’s announcement, at the Liberal Democrat conference, that parents could unlock their pensions to help their children onto the housing ladder.

“Parents are now going to have to help their children with deposits. In the good old days youngsters could save for a deposit but not now. So I think it’s a good idea.”

Mr Elgey is more guarded. He said: “There are significant numbers of first-time buyers who have to rely on family assistance – it’s become much more of a requirement.

“But pensions are a very sensitive subject. Whether it’s the right decision for the parents is questionable.”

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