All duty paid on properties worth £175,000 and under is to be suspended for a year, Hazel Blears has announced.
Homebuyers will no longer have to pay stamp duty on properties worth £175,000 or less for the next 12 months, the government announced today.
The tax suspension comes as the government unveils a raft of new measures aimed at tackling the current housing downturn. Under the plans, fears of rising repossessions among credit crunch-hit homeowners will be alleviated through a shortening of the period before income support for mortgage payments is offered from 39 weeks to 13 weeks.
Earlier today, it emerged that a £1 billion scheme to buy up and build cheap social housing and a 30 percent "free loan" service for first-time buyers on low incomes would also be part of the government's bid to boost the property market.
However, it is the stamp duty suspension which is the most eye-catching new policy - with around one half of all home sales over the 12-month period estimated to benefit from the tax break.
Communities secretary Hazel Blears said: "This is part of a whole series of announcements to help people with the current economic difficulties that they face. We can't solve every single person's problems for them... but what they do expect from government is, where we can, practical help."
Responding to the policy announcements, shadow chancellor George Osbourne said that the Conservatives were currently "look[ing] at the details of these measures". He added: "I suspect that what we will see in the coming weeks is a desperate and short-term survival plan for the prime minister rather that the long-term economic plan the country needs."
The plans were also criticised by leader of the Liberal Democrats Nick Clegg, who termed them a "hotchpotch" of policies designed to "save Gordon Brown's political skin", rather than the housing market.
