Budget brings no Stamp Duty relief


Today’s Budget will be a disappointment for potential first-time buyers hoping for changes in Stamp Duty tax bands.

The price of the average UK home has increased to a point where the majority of first-time buyers pay Stamp Duty at 1% (purchases above £125,000), while the number of properties in the higher bands has also risen dramatically in the past five years.

The current £250,001 and £500,001 Stamp Duty bands have been in place since July 1997, since when the percentage charged on properties in the £250,001 to £500,000 band has doubled from 1.5% to 3%. For properties above £500,000 it has doubled from 2% to 4%.

However, an estimated 95,000 people who will have an opportunity to purchase their first home through a shared equity schemes will not be required to pay the duty until they own 80% of the equity in their homes.

In addition shared-equity applicants will no longer need to raise three-quarters of the cost of a property, as the threshold has been lowered to 50%.

In his Budget speech, Chancellor of the Exchequer Alistair Darling, also announced that 70,000 new homes would be built on public land in 2008, in addition to the 40,000 already under construction.

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