MINISTERS are looking at cutting stamp duty in the hope of kick-starting the housing market.
Under the plan, stamp duty 'holidays' would be offered to first-time buyers while other homebuyers could have the level of the tax reduced.
Another option would involve raising the price bands at which stamp duty is levied.
The tax is charged a
t 1% on homes bought for £125,001 to £250,000; 3% between £250,001 and £500,000, and 4% over £500,000.
The number of homes being sold by estate agents across Britain has halved over the last year amid signs the country is facing a property slump. Experts have been warning the Treasury that stamp duty is one of the key deterrents for those buying a home.
A Treasury spokeswoman said: "We are looking at a wide range of options and nothing is being ruled out. However, we are not in a place to take the final decisions."
Last month, Chancellor Alistair Darling held talks with senior civil servants and economists to come up with ideas for this autumn's crucial pre-Budget report.
A spokesman for the Department of Communities and Local Government, which is responsible for housing, added: "We are working every day with stakeholders to look at what more we can do during this difficult period for the housing industry."
A report published last week claimed it was "almost impossible" for people on low incomes to buy their own home due to high house prices and the large deposits being demanded by lenders.
A couple in the bottom quarter of earnings would have to save more than a year's worth of their take-home pay to get on the property ladder in Great Britain, according to the Royal Institution of Chartered Surveyors.
The group said the increasing difficulties faced by people buying their first home were being driven by the huge deposits mortgage lenders now required, as well as the high level of stamp duty people had to pay.
Income for people in the lowest quarter of earnings has increased by an average of just 3.5% a year since 1996, while house prices in Great Britain have soared at an average rate of 10.3%.
The full article contains 377 words and appears in Scotland On Sunday newspaper.
