So Brown has introduced a stamp duty holiday as part of his rescue package for home owners and buyers. From tomorrow until 3 September 2009, properties costing less than £175,000 will be exempt from the levy. Oddly – even though plans for a stamp duty holiday emerged a few weeks ago – it’s still a surprising announcement. Since that initial leak, the government has kept a tight lid on the proposal, and – right up until this morning – it was widely assumed that it had been ditched.
There’s evidence to suggest it could prove popular with a public which is increasingly feeling the fiscal squeeze. But I’m still not convinced it’s the right thing to do. Not only are there question marks over how much of a boost it will actually give to the housing market (yes prices are falling, but the latest figures from Halifax have the average UK house price at £177,351 – indicating that a large proportion of sales will be unaffected by the change). But there’s also the argument that helping people to buy a house – in the current climate of collapsing prices and negative equity – is a curse rather than a blessing.
And what of the burden on taxpayers? The holiday’s said to be costing around £600 million. With the public finances in the state they’re in, don’t be surprised to see that funded by increased borrowing. Could it all be part of a scorched earth strategy, designed to leave nothing in the coffers for a Tory government? I certainly wouldn’t bet against it.
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