Bank warns homebuyers to be ready for 2010 return of Stamp Duty

The Nottingham has issued a statement warning homebuyers to be ready for 2010 reintroduction of Stamp Duty.

The lowest stamp duty threshold was temporarily raised from £125,000 to £175,000 on 2nd September 2008, and is due to return to normal 31st December 2009. As such, the Nottingham is urging anyone who is thinking of buying a home worth up to £175,000 to act now, or face the prospect of having to pay the Government as much as £1,750 in tax. If they exchange contracts before the end of the year their buyer can avoid paying Stamp Duty.

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.

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.

Lorraine Giddings, Head of The Nottingham’s Branch Network said:

“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.”

“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.”

“In recent weeks, we have seen more and more houses achieve their asking prices and a degree of confidence start to return. There’s also considerably more mortgage finance available to would-be buyers, thereby making home-buying a lot easier. So the essential ingredients are now in place for anyone wishing to get on the market and obtain a sale.”

“There are always good and bad times to sell a home,” Ms. Giddings continued. “And now is a good time. We are emerging from a particularly bad period and there is a lot of demand from buyers – and a shortage of certain types of homes. My advice to someone who has decided to sell is ‘get on with it!’ Providing the house is in reasonable condition, there are a lot of people out there who are seeking homes in the region with a price tag of £175,000, or less.”

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