Former Chancellor Alistair Darling scrapped the 1% stamp duty band on houses worth less than £250,000 in his last budget, but the move was only intended to last for two years.
The tax is now applied at 3% on sales between £250,001 and £500,000 and 4% in transactions where the price is above £500,000. Above £1 million, stamp duty is payable at 5%. There is also a stamp duty of 0.5% on all share transfers.
The Tories had originally pledged ahead of the election to abolish stamp duty on all property transactions below the value of £250,000 indefinitely, but Osborne failed to make mention of the tax in his budget speech today at all.
Earlier this week, the National Association of Estate Agents called for a review of the tax, with chairman Peter Bolton King saying Stamp Duty had a “dampening effect” on transaction levels and that there were "fundamental inequalities at the heart of this tax".
Paul Hunt, managing director of Phoebus Software said: “Alistair Darling argues the coalition is using the crisis as an excuse to do stuff that they wanted to do anyway. If that’s the case, the coalition should have taken the opportunity to clean up the way property transactions are taxed. Stamp Duty works on a "slab" basis instead of being a progressive tax.
“It’s not impossible to graduate a tax and we wanted to see stamp duty calculated like income tax. This would stop distortions of house prices at stamp duty limits and would allow properties to be sold for their correct value.”
Hunt called the silence a “missed opportunity”.
Steve Lees, marketing director of SmartNewHomes.com, added: “George Osborne made no mention of the property market but the ‘Red Book’ says that the Stamp Duty exemption for first-time buyers on homes up to £250,000 is under review. First-time buyers are the lifeblood of the property ladder, feeding demand from the bottom. A decision to maintain support for them would be a decision to support the market and would have indicated that there was substance behind Housing Minister Grant Shapps’s recent commitment to supporting home ownership. The exemption would also support regional economies as 95% of eligible buyers come from outside London and the South East.
“This measure deserves the Chancellor’s full support. To withdraw it would be a massive blow to the entire housing market.”
