After years in which the property industry has moaned about how stamp duty was bound to stifle the housing market, it has been tempting to see those gripes as a case of crying wolf.
Now it may be time to take those worries seriously. House prices have been falling for the past three months, as Halifax figures today testify, leaving the annualised rate of inflation at 4.5 per cent in January, barely above the average increase in earnings, and nearly half the long-term average of 11.4 per cent.
This year house prices are expected to remain at best flat. Meanwhile stamp duty rates remain payable on purchases at 1 per cent for properties worth £125,000 and above, rising to 3 per cent for properties worth £250,000 and above, peaking at 4 per cent for the total value of all property worth £500,000 or more.
The upper tier stamp duty rates were fixed in March 2000, doubling the rates imposed for the first time in July 1997 on the £250,000-plus and £500,000-plus band of homes. Before Labour came to power a simple flat rate of 1 per cent was payable on purchases of all properties worth £60,000 and over.
When homeowners have in the past thought of upscaling, adding on the extra cost of stamp duty has been painful but something many have chosen to take on the chin. Buyers have been optimistic that within a year or less that extra cost will have been more than made up for in the rising value of what, for most, is their largest asset.
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Now with house prices stagnating, the extra cost from stamp duty is likely to persuade those who are in two minds about moving to stay put. Considering that the average cost of a home is £300,000 in greater London and £259,000 in the South East, according to Halifax figures, the vast majority of home purchases will attract stamp duty land tax at the higher rates.
With banks tightening up their lending criteria, an extra £30,000 of stamp duty payable on a £750,000 home - the price of a half-decent terraced house in Central London - may just be enough to prolong the housing gloom for possibly a year longer than if stamp duty rates were back to their pre-millennium levels.
Labour was applauded for giving the Bank of England the freedom to set interest rates shortly after coming to power in 1997. But while interest rates are likely to come down this week, stamp duty rates - which remain the prerogative of the Treasury - are likely to prove more stubborn.