By Ian Pollock
Personal finance reporter, BBC News
There are obvious doubts about the effect of suspending stamp duty
Anyone who is in a position to buy a home worth between £125,000 (the old starting point for stamp duty) and £175,000 (the new starting point) will be happy.
The government's move will save them £1,750 each and cost it £600 million in foregone tax.
Perhaps the most interesting opportunity in the next year will be for buyers, with an eye on a home worth just over £175,000.
They may be tempted to try to cajole their vendors into lowering the price so that the sale goes through - tax free for the buyer of course.
But saving the odd couple of thousand pounds is not fundamental to the working of the property market at the moment.
"A suspension for one year on stamp duty for properties up to £175,000 is absolutely not the answer to the problem," said Ray Boulger of John Charcol.
"It will help a small minority of people, but the issue lies more with mortgage lenders and their "shut up shop" attitude to lending above certain loan-to-values."
According to estimates from the Council of Mortgage Lenders (CML) there were just over 289,000 mortgages granted to house buyers in the first half of this year in the UK.
Of those 50,000 would have benefited if the new tax regime had applied and the CML reckons that 22,500 of them would have been first time buyers as well.
So the figures are noticeable without being huge.
Will they actually have much effect on the market as a whole?
"This won't help the real problems much, as anyone who cannot afford to pay 1% tax on a property should not be buying a house in the first place, as their resources are clearly too stretched," said Liz Peace, chief executive of the British Property Federation.
The much bigger problem is that banks and building societies have been forced to ration drastically their mortgage funds by raising the deposit required to buy a home.
Many people who, a year ago, thought they might be certain to be granted a mortgage have had a big surprise.
They are now routinely told they have to raise a deposit of 10%, 15% or even 20%, instead of the previous standard 5% deposit, which for many is a financial stretch too far.
Thus the housing market as been plunged headlong into its biggest and quickest slowdown since World War Two.
Tweaking tax rates will not, on their own, change that outlook.
It is worth remembering that when the then Tory Chancellor Norman Lamont suspended stamp duty for eight months during the middle of the last property slump, in December 1991, it had no effect at all.
House sales, and prices, continued falling the following year.
The government says it thinks that about half of all residential property sales will now be exempt from stamp duty.
That looks about right.
According to the latest data from the Land Registry, nearly half of all sales in England and Wales during May were worth between £100,000 and £200,000.
So the majority of these will now not be taxed for the next 12 months.
Taking into account the sales worth less than £100,000 - just over 8,000 in May - it does seem likely that on current trends, not least the fact that prices are falling, that about half of all sales will now be excused from the tax.
This latest change, targeted firmly at average priced homes, is not a great tax "give-away".
Until very recently stamp duty on house sales had become a lucrative money-spinner for the government, thanks to booming prices and buoyant sales.
On residential sales alone, income from the tax rose from £2.69bn in 2001-02, to £6.45bn in 2006-07 (the last year for which the HMRC has published statistics).
But most of that - just over £5bn - came from the most expensive properties worth more than £250,000, on which tax is levied at 3%, or 4% if they were worth more than £500,000.
Meanwhile overall sales have slumped by about 50% in the past year and are likely to fall even further, if the 71% fall in mortgage approvals is anything to go by.
So the government's tax take from stamp duty on home sales was always going to shrink dramatically anyway, regardless of raising the price level at which it kicks in, from £125,000 to £175,000.