Stamp duty get-out if you insulate your home
Published
31st Jan 2011
Homebuyers who agree to insulate their properties could benefit from a cut in stamp duty under plans being considered by George Osborne.
They would see the amount slashed if they sign up to the new 'Green Deal' scheme to make their home more environmentally friendly.
The Government estimates that the incentive will help create about 75,000 jobs in the insulation industry. The Chancellor also hopes it will boost the flagging housing market.
It is envisaged that rather than having to pay for new insulation up front, householders would meet the cost from money saved on future fuel bills.
The Conservatives promised in last year's general election manifesto to look at ways of penalising owners of properties which waste energy through bad insulation, draughts and old boilers.
The scheme could come into effect as soon as next year. It would initially apply to the 3.8m homes rated F or G for efficiency. All homes for sale are graded, from A-G.
Stamp duty thresholds start at £125,000 at 1% - or £250,000 for first-time buyers - moving to to 3% above £250,000 and 4% above £500,000.
A new threshold of 5% above £1m is also set to be imposed from April – this was announced by the then Chancellor Alistair Darling and has been kept by the Coalition Government.
Until 1997, stamp duty was imposed at a flat 1%. The current system of extra thresholds was introduced by Gordon Brown as Chancellor, who then increased percentages and cashed in as the property boom got underway.
Had the £250,000 threshold risen in line with house price inflation it would now stand at £675,000, according to Nationwide index figures. The £500,000 threshold would now be at £1.35m.
The duty has been criticised for hampering the economy by reducing freedom of movement. It was criticised by the OECD recently at the launch of a new report on Housing the Economy. It suggested replacing duty with an annual property tax based on a home's value.
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