End of stamp duty holiday 'may not have detrimental effect'

Posted: 18 Nov 2009 08:38:18 GMT

Despite any positive effects the stamp duty holiday may have offered to first-time buyers, it should not have a "distorting effect" on the property industry when it ends.

This is according to the Royal Institution of Chartered Surveyors (Rics), who noted that because it has not lead to a rush of new houses onto the property market, there should not be too much of a fall in buying and selling activity once it is over.

"However the additional transaction cost is still a worry to many, particularly first-time buyers and is a threat to the market in the areas of the country that are still seeing a weak price environment," explained Simon Rubinsohn, chief economist for Rics.

Mr Rubinsohn added that Rics would like to see a situation where no one purchasing a home would have to pay any tax on the first £150,000 of the property.

According to the latest figures from the Council of Mortgage Lenders, in September, one-third of first-time buyers were able to avoid paying stamp duty due to the current tax holiday. It is thought that 132,500 mortgage transactions have escaped stamp duty since the nil-rate band was introduced in 2008.


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