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Stamp Duty Land Tax

Volume 493: debated on Monday 1 June 2009

To ask the Chancellor of the Exchequer (1) pursuant to the answer to the hon. Member for Peterborough (Mr. Jackson) of 12 March 2009, Official Report, column 722W, on stamp duty land tax, what assumptions were made about the take-up rate of the stamp duty land tax holiday in calculating the estimated cost of £280 million; (275773)

(2) what recent assessment has been made of the effect on the housing market of the temporary £175,000 stamp duty land tax threshold.

The stamp duty holiday announced on 2 September 2008 provides Government support for homebuyers at a time of difficult conditions. Data on property transactions can be found at

http://www.hmrc.gov.uk/stats/survey_of_prop/index.htm.

The estimated cost of the stamp duty holiday of £280 million was based on the most recent SDLT receipt data and accounting for expected changes in house prices, transactions and behavioural effects available at the time of the pre-Budget report. The Treasury does not publish forecasts of house prices or transaction volumes.

The cost was updated at Budget 2009 to take account of the latest information available and the extension of the holiday to 31 December 2009. Our latest estimate puts the cost of the original holiday at £250 million, with an additional cost of £90 million for the extension to December 2009.

Around 90,000 transactions (in addition to those falling below the original £125,000 threshold) have already been exempted from stamp duty by the holiday. Looking ahead the Treasury expects that around 210,000 transactions will benefit from the holiday in total, and that around 60,000 of these will benefit as a result of the extension announced at Budget.