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.
Tags: coalition agreement, first time buyer, stamp duty, Stamp duty in the United Kingdom, Herald Sun, tax, moveThe 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.’
Stamp duty takes its toll on first time buyers
March 11, 2008 by admin
Filed under News, News-Mortgages
Rocketing house prices mean that hardly any properties in the south of England are selling for less than the stamp duty threshold. 
A new survey from Halifax found that in 2007, the average first-time buyer paid stamp duty in 99 per cent of local authorities in the south-east, south-west, London and East Anglia.
That figure was just 42 per cent in the rest of England and Wales.
A buyer becomes liable for stamp duty at a rate of one per cent of the sale price – payable on top of all the other costs – when the property bought costs more than £125,000.
And not only are the numbers having to pay stamp duty rising, but the sums actually paid are much higher than in the past too.
The average first-time buyer paid £1,751 in 2007, compared to just £960 in 2002.
Moreover, in 19 per cent of local authorities in the south, 19 per cent of first-time buyers were actually having to pay the higher rate of stamp duty – three per cent, which applies to purchases worth over £250,000.
Halifax’s chief economist Martin Ellis warned that the stamp duty system is making buying a home less and less affordable.
He said: “We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade and to commit to index the thresholds for house price inflation in the future.”
Stamp duty is “big financial barrier”
March 23, 2007 by admin
Filed under News, News-Mortgages
The tax man is expected to reap the rewards of Gordon Brown’s final Budget with an additional £1.4 billion expected to enter his coffers as a result of stamp duty alone.
It comes as the Chancellor failed to raise stamp duty thresholds despite the average house price soaring in recent years.
The higher thresholds have been in place since 1997 yet in that time the average house price has rocketed by 175 per cent.
It means that more and more people are now expected to pay the tax, with first-time buyers being hit hardest as they struggle to get a mortgage and take their first steps onto the property ladder.
Homebuyers are required to pay one per cent stamp duty on a property which costs up to £125,000, three per cent for a £250,000 property and four per cent for one valued at £500,000.
The problem is that an estimated 3.5 million homes in England and Wales are now valued at more than £250,000.
“Stamp duty should be indexed in line with house prices and inflation,” said the Council of Mortgage Lenders’ Christopher Dean. “It is a big financial barrier.”
The Treasury has admitted that two fifths of homebuyers in the country will now be required to pay stamp duty.
