UK raises threshold on property purchase tax to boost housing market after COVID

LONDON, July 8 (Reuters) - Britain will raise the threshold of a tax on property purchases from 125,000 pounds to 500,000 pounds to boost activity in the housing market after the coronavirus lockdown, finance minister Rishi Sunak said on Wednesday.

"This will be a temporary cut running until 31st March 2021. And, as is always the case, these changes to stamp duty will take effect immediately," Sunak told parliament during a statement on the outlook for the economy.

He said the average stamp duty bill will fall by 4,500 pounds, and nearly nine out of ten people buying a main home this year will pay no stamp duty at all.

The changes apply in England and Northern Ireland, as Scotland and Wales have different tax systems.

Bank of England data showed mortgage approvals for house purchases fell to a record low in May, when few potential buyers could visit properties, though there have been reports of a bounce in demand in June. (Reporting by David Milliken and James Davey; editing by Stephen Addison)