Following reports that Chancellor Rishi Sunak is drawing up proposals to temporarily raise the property tax threshold to £500,000, Zoopla has reported that this would mean an additional 73% of sales would be exempt from the basic level of Stamp Duty.

Added to the present figure of 16% of sales falling under the current £125,000 price band, this would mean 89% were exempt in total for the six-month period being suggested.

The policy would extend a Stamp Duty saving of up to £14,999 for a home purchase for non-first-time buyers, and an overall saving of around £1.3bn across the six months.

Government to introduce temporary stamp duty exemption

There are 28 local authorities in which more than 90% of home sales would be free of Stamp Duty were this policy to come to fruition, compared to levels of less than 5% under the current system.

These include Barking and Dagenham, Harlow, Crawley, Luton, York and Northampton.

Richard Donnell, research and insight director at Zoopla, said: “Stamp Duty holidays are a tried and trusted way to support housing market activity and provide an additional incentive to move home at times when the economy has been hit.

“Temporarily removing stamp duty for homes up to £500,000 for six months will cost the Treasury £1.3bn, but it will ensure almost nine in 10 sales will be free of the tax, compared to just 16% now.

“The greatest benefit will be found in markets across southern England where there are more homes with average prices closer to £500,000.

“Housing activity has already rebounded strongly since the market reopened and any major change to stamp duty would provide a further boost to demand for housing.

“The government would hope that the savings feeds into additional spending in the real economy with more cash spent on home improvements and white goods rather than enabling buyers to spend that bit more on their next home.”