Stamp duty suspension: MP Dan sceptical

THE Law Society has welcomed the move to suspend stamp duty on properties worth £175,000 or less for one year – but fears it might be too little, too late.

Society president Paul Marsh said its members had been pressing for this tax burden to be alleviated for many years.

"Now it seems the Government has waited until the last moment to listen," he warned.

The reaction came in the wake of the stamp duty "holiday" announced by Chancellor Alistair Darling last Tuesday. It followed criticism of the move by Dan Rogerson, MP for North Cornwall, who said he believed the one-year suspension "will have no useful effect whatever".

"This is aimed at headlines in the south east of England," claimed Mr Rogerson. "It probably won't even help there, and it certainly won't help here."

However, many estate agents in Cornwall broadly welcomed the step which will save first-time buyers up to £1,750. The decision to raise the threshold on which 1% stamp duty is paid – from £125,000 to £175,000 – formed part of a raft of measures to revive the ailing housing market.

In a separate announcement, Communities Secretary Hazel Blears pledged a further £1 billion to support hard-pressed homeowners. The Government also unveiled a shared equity scheme to help first-time buyers climb on to the housing ladder.

But Mr Marsh said those seeking to buy property under this initiative risked losing out if the housing market picks up.

The equity share scheme allows vulnerable families who are no longer able to keep up with their mortgage repayments the chance to sell their home and rent it back, or to enter into a shared equity or shared ownership scheme on the property.

Mr Marsh said: "While any move by the Government to tackle the troubled housing market is welcomed, we are concerned that if the market picks up those homeowners in the scheme will be losing out as they will have a smaller proportion of the property's equity.

"This is a very short term solution which runs the risk of leaving many homeowners on lower incomes in these equity share schemes trapped. Sharing the equity also means sharing the sale proceeds of any eventual disposal. If a homeowner has a 50% share, they will only get 50% of the value."