Rishi Sunak will not delay a stamp duty cut slated for his mini-Budget tomorrow after warnings that the housing market would be wrecked for months.
The Chancellor’s crucial coronavirus recovery package is expected to include a six-month ‘holiday’ from the charge on most homes to kick-start the market.
However, economists voiced alarm at the idea that the move could be announced to the Commons, but not implemented until the Autumn.
Fears were raised that purchases would grind to a halt as people would simply wait in order save thousands of pounds.
Sources told MailOnline that there would not be any delay in the implementation of a stamp duty cut.
Economists and property experts have warned that delaying stamp duty changes could put the housing market into the deep freeze (File photo)
Treasury officials have been looking at a temporary six-month increase in the stamp duty threshold from the current level of £125,000 to an amount between £300,000 and £500,000 to stimulate demand.
But economists and property experts warned that a delay until Autumn, as had originally been mooted, could put the housing market into the deep freeze.
The Chancellor is considering a six-month stamp-duty ‘holiday’ on most homes later this year to kick start Britain’s dormant market
Paul Johnson, of the Institute for Fiscal Studies, said any uncertainty about a potential change would distort the housing market by encouraging people to delay their decisions.
He said Mr Sunak must launch any duty holiday tomorrow or decisively rule it out.
‘To do otherwise could ruin the housing market for months to come,’ said Mr Johnson.
His comments were echoed by buying agent Henry Pryor, who said: ‘Either announce that you are changing stamp duty or announce that you are not.’
Economist Julian Jessop urged the Treasury to ‘stop flying kites’ over potential cuts in both stamp duty and VAT.
He said: ‘The announcement of a stamp duty holiday, but not until the autumn, could kill the housing market in the meantime.
‘There has been similar speculation of an across-the-board VAT cut, which could delay spending on other big ticket items too.’