BUDGET 2010: Darling confirms Stamp Duty threshold will be raised
Share
Chancellor Alistair Darling has confirmed that the starting threshold for Stamp Duty will be raised from £125,000 to £250,000 for first-time buyers.
The reform will come into effect from midnight tonight and will apply for this year and next.
Darling says that nine in 10 first-time buyers will be helped by the move.
To compensate for raising the threshold, the levy for properties over £1m will be charged at 5%.
The government introduced a Stamp Duty holiday in September 2008 which raised the starting threshold for Stamp Duty from £125,000 to £175,000.
This lasted until December 31 last year, causing a rush of transactions ahead of the threshold being returned to £125,000.
There were calls from many in the mortgage and housing markets to extend the Stamp Duty holiday beyond December 31 and reform the current ’slab’ system where Stamp Duty is charged as a percentage of the total purchase price depending on the value of the property.
Until now, Stamp Duty was applied as follows:
- A levy of 1% of the purchase price had to be paid by those buying a property of over £125,000 and up to £250,000.
- The tax went up to 3% for properties over £250,000 and up to £500,00.
- Properties worth over £500,000 were charged Stamp Duty at a rate of 4%.
The Council of Mortgage Lenders has calculated that 92% of first-time buyers would have been exempt from Stamp Duty had the starting threshold been at £250,000 last year.
The £175,000 threshold in place last year meant that 73% of first-time buyers were exempt from paying the tax.
View results 10 per page | 20 per page
Readers' comments (18)
Anonymous | 24 Mar 2010 1:03 pm
for just FTB or every property transaction ???...if just FTB how the hell does he expect to police that ???
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 1:08 pm
Does this apply to houses that complete after today or exchange>
Unsuitable or offensive? Report this comment
Paul | 24 Mar 2010 1:10 pm
What a complete waste of time! How many FTB can get a mortgage over £125k anyway? This helps who exactly? A single applicant requires an income of over £35k pa to get a property at £125k or £71k for a property at £250k. Get real.
Unsuitable or offensive? Report this comment
colin | 24 Mar 2010 1:11 pm
comes in from midnight, so completions tomorrow onwards. I have a client that completed at 11.00am...although she wasn t a FTB....so probably doesnt qualify anyway, but the detail is a bit sketchy as to how they expect it to be monitored if its only FTB's
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 1:18 pm
I wonder home many MP's will now become first time buyers next time they are fiddling their expenses on their second homes?
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 1:28 pm
What happens if it's a couple and one is and one isn;t?
Unsuitable or offensive? Report this comment
John | 24 Mar 2010 1:33 pm
So this is just for FTB's eh?
I do hope that the definition of EXACTLY what a First Time Buyer is will be given, as a lot of lenders seem to have different ideas of what does and does not constitute a First Time Purchase!
As usual very few will benefit, BUT the Government will reap the rewards on all Properties over £1m...cute eh?
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 1:42 pm
Smoke and mirrors people, smoke and mirrors!!!
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 2:05 pm
I am exchanging on a house tomorrow. Purchase price is 249,950. I am first time buyer. Will the stamp duty be taken off my solicitors bill?!
Unsuitable or offensive? Report this comment
Anonymous | 24 Mar 2010 2:16 pm
@ Paul 1:10.
Your assumptions are based on lending 3 x income. You will be pleased to know that it is now possible, and has been for some time now, to get upto 4 x income and more depending on the deposit put forward.
You might also be shocked to know that several first time buyers also go above the £250K mark and the average house price is about £220 000!
Unsuitable or offensive? Report this comment