Tories urge stamp duty decision

Stamp duty raised £6.5bn for the government last year

Alistair Darling should end "damaging uncertainty" about his stamp duty plans and make a decision as soon as possible, the Tories have argued.

In a letter to the chancellor, Tory Treasury spokesman Philip Hammond accused ministers of playing "short term games" with the property market.

Mr Darling refused to rule out changes to stamp duty after reports it may be axed temporarily to boost house sales.

Estate agents say the uncertainty could cause people to delay buying houses.

On Tuesday Mr Darling refused to be drawn on reports that stamp duty was to be temporarily scrapped, as part of an economic recovery package being put together by the prime minister.

We now have the worst of both worlds - a potential delay in property transactions, but with no definite proposal on the table Philip Hammond Shadow Treasury chief secretary

He told the BBC he was "looking at a number of measures" and had not "concluded exactly what we need to do".

In his letter, Mr Hammond, shadow chief secretary to the Treasury, said floating a stamp duty suspension without confirming it one way or the other had "created a significant incentive for people to delay the purchase of a property in the hope of avoiding the payment of stamp duty on the transaction".

"The uncertainty can only undermine the market further, reducing the volume of transactions when they are already at historic lows," he said.

"Indeed, we now have the worst of both worlds - a potential delay in property transactions, but with no definite proposal on the table."

The government needs to come out and say 'this is what we are doing', otherwise people will just sit back and wait, which is the last thing this delicate market needs Peter Bolton-King National Association of Estate Agents

He urged the government to make an announcement and "end this damaging speculation...so that people can make informed decisions about whether to try to buy or sell their property".

Peter Bolton-King, chief executive of the National Association of Estate Agents, warned the uncertainty could cause people to question whether to make a house purchase.

"The government needs to come out and say 'this is what we are doing', otherwise people will just sit back and wait, which is the last thing this delicate market needs," he said.

"From the customers' point of view it could result in them losing the house they set their heart on."

Support pledge

Mr Hammond said the government should adopt shadow chancellor George Osborne's "fully-funded" proposal, announced last October, to lift the stamp duty threshold for first-time buyers to £250,000.

"This would lift nine out of ten first-time buyers out of stamp duty altogether and provide badly needed assistance to a group who are finding it increasingly difficult to enter the market," he wrote.

He pledged Conservative support to get the necessary legislation through Parliament if that proposal was adopted.

Currently, people buying properties for between £125,000 and £250,000 pay 1% in stamp duty at the time of sale.

Those spending more than £250,000 pay 3%, while homes worth more than £500,000 incur a 4% rate.

The Conservatives temporarily suspended the tax on homes worth less than £250,000 during the 1991 recession.