No Stamp Duty for First Time Buyers for Two Years

Chancellor Alistair Darling has given first time buyers a helping hand in his pre- election budget.

The stamp duty threshold has been increased from £125.000 to £250,000 for first time buyers only which means that nine out of ten first time buyers will not have to pay any stamp duty at all. The exemption ends 25th March 2012. It should be noted that anyone who is a first time buyer in the UK but owns or has owned property abroad would not qualify for the exemption. It is estimated that this will cost the Treasury about £224 million.

It only applies to someone who has never bought a residential property anywhere. If you are buying with another person this person must also be a first time buyer. Solicitors will need to check if house- buyers have ever bought properties before. If you are not a first time buyer you will still have to pay stamp duty, starting at 1%, on any property valued at over £125,000.

The change will be funded by an increased stamp duty level to 5% from 4% on properties worth more than £1 million. However there is no time limit to this as it is being introduced indefinitely. This increase is expected to bring in about £250 million for the Treasury.

This is good news for some but it will no doubt be bad news for second time buyers moving from a very small first time property and wishing to move up to something slightly larger which is valued at less than £250,000.

More than 40% of all properties currently on the market cost between £125,000 and £250,000

NOTE: Do not make any financial decisions based on the information on this page. Always take professional mortgage advice first

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