Brown unveils support plan for housing market

LONDON: Britain’s Prime Minister Gordon Brown yesterday cut an unpopular tax on home purchases as part of a package to boost the country’s slumping housing market and lift his flagging political fortunes.

Brown’s government said properties worth less than £175,000 would be exempt from the tax, known as stamp duty, for one year, up from a £125,000 threshold now.

The step was accompanied by a £1bil package to help first-time home buyers and people struggling to keep up with mortgage payments.

“The stamp-duty holiday may provide the domestic housing market with a marginal stimulus but we doubt it will have a major effect in getting the housing market moving again,” said Philip Shaw, chief economist at Investec.

The treasury said the rise in the threshold would cost it an additional £600mil and that half of home transactions would now be exempt from duty.

House prices in Britain are sliding and home repossession orders in England and Wales have risen to their highest level since the housing market crash of the early 1990s.

By Reuters