New government may reverse stamp duty break for first time buyers

In the budget by the former Chancellor of the Exchequer, Alistair Darling, earlier this year it was announced that there was to be a stamp duty break for first time buyers in the UK, and that first time buyers would be able to buy a property up to the value of £250,000 without having to pay any stamp duty.

The former Labour government was hoping to help more first time buyers onto the property ladder and to revive the housing market through this move. The increased stamp duty exemption threshold was twice the standard levels, which is £125,000, and was made available for first time buyers only.

However, it has emerged that the new coalition government is considering scrapping the extension on stamp duty exemption, which means that first time buyers could have this important tax break pulled out from under them just months after it was originally introduced.

The extension on stamp duty exemption was set to last for two years until 2012, but as part a range of cutbacks the new coalition government could end up getting rid of the stamp duty break. The Conservative party had previously supported increasing the stamp duty exemption threshold for first time buyers, and the Labour party was said to have pinched the idea from the Tories.

In fact, many thought that the Conservative party would make the increased exemption permanent if elected, but instead the government is considering scrapping the tax break altogether in a bid to save more money to clear the public deficit.

The recent budget stated: ‘As announced in the Coalition Agreement, the Government will review the stamp duty land tax relief for first time buyers taking into account its impact on affordability and value for money.’