"Whenever there has been a temporary easing of stamp duty, such as in the immediate aftermath of the Covid lockdowns, house prices have then risen. It is more difficult to judge whether a permanent abolition would have the same long-term impact on prices as the short-term sweetener of a stamp duty holiday. However, greater demand is likely to feed through to asking prices."
""If, and this is a big if, it is a simple tax giveaway, the likelihood is that the current stamp duty bill simply passes through into prices," says Lucian Cook, head of residential research at Savills. In turn, that could mean first-time buyers paying less in stamp duty, but having to find a bigger deposit. "Given the way stamp duty works, this would be unevenly distributed across the country," Mr Cook added."
A proposal to abolish stamp duty on purchases of main homes has attracted political attention and speculation about replacing the tax. Temporary stamp duty holidays have been followed by rises in house prices, and a permanent abolition could similarly see the current tax effectively passed through into higher asking prices. That pass-through would reduce stamp duty paid but increase deposit requirements for buyers. The impact would vary regionally because stamp duty control differs across devolved administrations. Many first-time buyers already receive exemptions on properties up to £300,000, but deposit affordability remains the primary challenge.
Read at www.bbc.com
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