What is the thinking behind the stamp duty cut?

MPs are expected to vote today to abolish the tax on the purchase of homes worth less than £500,000 – but will it be a boost for buyers, asks John Rentoul

The chancellor’s hope is that the measure will have knock-on effects (AFP/Getty)

The House of Commons will vote today on the Stamp Duty Land Tax (Temporary Relief) Bill, which will abolish the tax on the purchase of homes worth less than £500,000 until the end of March.

This was one of the measures announced by Rishi Sunak in his mini-Budget last week, designed to get the economy moving again. The chancellor said that “uncertainty abounds” in the housing market, and: “We need people feeling confident – confident to buy, sell, renovate, move and improve. That will drive growth. That will create jobs.”

Will it work? The good news is that we have a good idea of the effect of a temporary stamp duty cut, because Alistair Darling, the Labour chancellor, did it in the pre-election budget in 2010. His was a more modest cut, raising the threshold from £125,000 to £250,000, and only for first-time buyers. But it was a real-world experiment that allowed HM Revenue and Customs to carry out a study.