Stamp Duty Cut possible in Mini-Budget

A report in the Times newspaper says Chancellor Jeremy Hunt is planning a stamp duty cut in the early autumn.

The paper says he favours increasing the threshold at which homebuyers pay the tax from £250,000 to £300,000.

The threshold increase is believed to be costed at around £3 billion per year by the end of the decade and would mean an estimated 50% of people buying a house would no longer need to pay stamp duty.

Currently people begin paying stamp duty at 5% of the value of a property over £250,000, with the rate increasing to 10% beyond £925,000 and 12% for properties valued at more than £1.5m.

The Times says Housing Secretary Michael Gove favours a stamp duty cut as part of a package to help first time buyers.

The Daily Mail carries a similar report, while the Financial Times over the weekend suggested the mini-Budget would be held in September.

All of these press reports are believed to have been inspired by briefings from government sources.

A stamp duty cut after the summer may boost the market just when it’s needed. Rightmove this morning warns that a mix of the traditional August slowdown, the Olympics and the anticipation ahead of the General Election could make for a weaker market in the second half of the year.

Hunt has already hinted in speeches that there will be a fiscal event of some kind ahead of any election and that the impact of lower taxes combined with falling inflation and possible interest rates could improve voter sentiment in favour of the Conservatives.