Stamp duty rumours 'simply wrong'

The government has moved to distance itself from rumours of a potential stamp duty holiday, calling speculation "simply wrong".

Earlier this week, the Sun newspaper reported chancellor Alistair Darling was considering a hiatus on the unpopular tax, as a method of spurring activity in the flagging property market.

Questioned by the BBC's Today programme over the speculation, Mr Darling pointedly refused to deny the claims, claiming the government was considered "a range of options", stoking further rumours the government was indeed about to take such action.

However, the rumours have caused consternation as well as celebration.

Estate agents have warned confusion over the future of stamp duty may encourage homeowners to delay purchasing property until any potential stamp duty 'holiday' comes into force, forcing transaction levels lower than their already depressed state.

The Bank of England recently revealed transaction levels fell 70 per cent during the first quarter of the year when compared with 2007.

Today, however, the Treasury attempted to put an end to speculation, releasing a statement saying: "Recent news stories suggesting the government has put forward a proposal on stamp duty are simply wrong. These stories are based on speculation.

"As has been said on many previous occasions, the government has made clear that there are a number of options we will need to consider to help businesses and people get through what is undoubtedly a difficult time."

Homebuyers presently pay one per cent in stamp duty for properties valued between £125,000 and £250,000.

Those spending more than £250,000 pay three per cent, while homes worth more than £500,000 incur a four per cent rate.

Chris O'Toole