Nottingham Property Services (NPS), the estate agency arm of The Nottingham, believes a large number of people living in the East Midlands could be hit with unwanted Stamp Duty liabilities should the Government choose to reintroduce the tax in 2010.
The estate agency is urging those who have a home worth £175,000 or less and are currently thinking about selling a home, negotiating with buyers, or have sold subject to contract, to pull out all the stops complete the sale. If they exchange contracts before the end of the year their buyer can avoid paying Stamp Duty.
The temporary changes to Stamp Duty were introduced on 2 September 2008 and are scheduled to run until 31 December 2009. What happens next is open to debate as Chancellor Alasdair Darling and Treasury officials have not ruled out reintroducing the tax for those buying homes worth between £125k and £175k in the New Year.
NPS believes that during the period September 2008 to June 2009 - the latest period where official HM Land Registry figures are available - the Government forfeited almost £18.41 million on 14,985 residential home purchases in the East Midlands that were covered by the Stamp Duty holiday.
Nationally the government could have forfeited more than £274 million on 174,000 house purchases that were completed during the same period.
"If the Government maintained the current position on Stamp Duty it would be a welcome boost for the national and local property markets. But I think predicting which way any decision will go is too close to call," commented Lorraine Giddings, head of The Nottingham's branch network.
"On one hand the Government is in a difficult position as it needs the revenue that is generated from Stamp Duty. On the other, the housing market is at the beginning of a long road to recovery and any decision to reintroduce Stamp Duty could hinder progress.
"In my opinion, the Chancellor is going to have to do something - but second-guessing which decision he will make could prove very hard. That's why we are recommending to people who are serious about selling their homes that they should act decisively now."
