Over 40% of homes in UK would be stamp duty free if threshold was raised to £250,000
Some 43% of properties currently on sale in the UK would be exempt from stamp duty if the minimum level of the tax was increased to £250,000, according to new research.
It has been suggested that Chancellor Philip Hammond may introduce a temporary stamp duty freeze on lower prices properties to help first time buyers. The current limit at which the property tax kicks in is £125,000.
The analysis from online agent HouseSimple looked at the number of properties currently for sale in 80 major UK towns and cities, and the number of those properties that are on the market for £250,000 or less.
It found that in 15% of these towns, more than 90% of properties would be stamp duty exempt for first time buyers if the 0% stamp duty threshold increased to £250,000. And in 45% some three quarters of properties would fall into the 0% stamp duty band.
The impact would be biggest in Hull where 97% of properties are on sale for £250,00 or less, followed by Gateshead with 95.2%, Middlesbrough with 94.5%, Carlisle with 94.3%, Wigan with 93.9% and Blackpool with 93.9%. In Barnsley, Grimsby, Sunderland, Bradford, Darlington and Hartlepool over 90% of properties also fall into this category.
London has the fewest number of properties for sale under £250,000 at just 2.4%, by far the lowest nationwide, followed by Watford with 11.4%, Cambridge 11.8%, Oxford 13.9%, Guildford 16.1%, Brighton 17.1% and Bath 18.5%.
If a stamp duty holiday is announced in the Budget it would not be the first time this has been done. Chancellor Alistair Darling announced a two year stamp duty freeze for first time buyers in March 2010.
Alex Gosling, HouseSimple chief executive officer, does not believe there will be a complete freeze. ‘It’s more likely the Chancellor will raise the zero percent threshold to benefit the majority of first time buyers who are on average salaries and are looking to purchase properties below the average UK house price,’ he said.
‘The last time the threshold was raised to £250,000 it had the desired effect of freeing up the market, so there’s every chance Hammond will do something similar. This is probably not the time to be overly charitable and raise the 0% band to £300,000 or even higher to the level of average London house prices,’ he added.