The stamp duty holiday extension on property valued at under £175,000, which came into effect on 3rd September 2008, will end on the 31st of December 2009. Many Estate Agents and first time buyers are worried that the extension will not exceed the December deadline.
Residential properties valued between zero and and £175,000 currently pay no stamp duty. However, unless the holiday is extended, home-buyers will face a charge of 1% of the total property value on homes valued over only £125,000 after Dec 31st.
With the typical house purchase taking three months from start to completion any house bought after the 30th of September with a value of over £125,000 will face paying the 1% stamp duty charge unless completion is achieved before the 30th of December.
But do you know of any solicitor who is open between Christmas and new year?
The stamp duty deadline has been used by Estate Agents as a marketing tool to push as many sales through before September which could explain in part the slight retracement in house prices over the last few months.
With a tax bill of up to £1,750 added on top of the initial deposit this may make a dent in the average house price and drag the asking price of a house currently valued at around the £130,000 – £135,000 down to below the £125,000 mark. This will in turn pull down the values of other houses valued slightly higher again through automated valuations.
Is this a sensible time for the chancellor to reduce tax revenue even by extending the Stamp Duty holiday? So continuing to prop up the over priced housing market at the expense of the tax payer.
------ Other articles of interest ------
Tags: economics, house price crash, house price news, housepricecrash, News, Politics, residential housing
Comment
Why the Daily Mail is #1
William Hague’s comments are an insult to British business