Carly Sargeant of the legal firm Clarkson Wright & Jakes LLP reflects on the recent stamp duty changes.
Earlier this month the Government announced stamp duty will not have to be paid for homes costing up to and including £175,000, for the next 12 months. Prior to this the threshold was £125,000.
This is the only threshold that has changed and so stamp duty is still charged at one per cent for properties costing between £125,001 and £250,000, three per cent for properties costing between £250,001 to £500,000 and four per cent for properties costing more than £500,001.
The new threshold means a person buying a property for £175,000, will now save £1,750, which the Government states will cost them in the region of £600m.
The Chancellor, Alistair Darling, estimates that half property transactions will now be exempt from stamp duty, a contrast to only one third when the threshold was £125,000.
The Government also announced free five-year loans for up to 30 per cent of a property’s value for first-time buyers in England, encouragement of building more social housing, shortening the period of time before Income Support for Mortgage Interest is paid and extending powers of councils and housing associations to pay for debt for home owners who can no longer afford mortgage payments.
Some believe this is too little too late and a short-term survival plan.
The Conservatives say they would scrap stamp duty for first-time buyers on homes worth £250,000 or less. More Government plans will be given in Mr Darling’s Autumn Pre-Budget Report.
For information or advice relating to this or other legal matters, contact Carly Sargeant on 01689 887887 or email email@example.com For information on Clarkson Wright & Jakes LLP and its legal services, visit www.cwj.co.uk
Most of the county’s estate agents have welcomed the decision to raise the stamp duty threshold.
"We welcome any changes which encourage more movement in the housing market and feel this is something that buyers have been waiting for, particularly first-time buyers," said Jackie Davies, area sales director for Your Move.
"We hope, however, that this cut in stamp duty will become permanent after September 2009 and that a wholesale review of stamp duty on property purchases will be made."