Rishi Sunak hints that stamp duty cut could be made permanent
The stamp duty cut could become permanent, Rishi Sunak suggested as economists said it could push up house prices after they dipped year-on-year for the first time in eight years.
On Wednesday, the Chancellor announced that the threshold at which people start to pay stamp duty has been lifted from £125,000 to £500,000 until March 31.
Asked by Sky News why he would not make the move permanent, Mr Sunak said "in the first instance" he wanted to see what impact this would have on house-buying activity.
Economic think tank the Institute for Fiscal Studies (IFS) said the measure is likely to push up house prices. UK house prices were 0.1 per cent lower in June than a year ago – the first annual fall since 2012, according to Nationwide.
First-time buyers will be left worse off, according to the IFS and the Resolution Foundation, which said it was a "tax cut for Londoners", with average savings in London expected to be £14,200 compared with £700 in Yorkshire.
By passing on the tax cut to second home owners and landlords, the measure will make the market more competitive for first-time buyers, who already benefited from zero-rated stamp duty up to £500,000 in London and up to £300,000 in the rest of the country.
Labour has estimated that second homeowners and landlords will benefit from a total £1.3 billion tax break as a result of Mr Sunak's mini-Budget.
The IFS also said the measure may have been brought in too soon and may need to be extended beyond March 2021 to avoid depressing the market after it.
