Question marks over stamp duty threshold
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The coalition Government has revealed it is to review the effectiveness of the increase in the stamp duty threshold for first-time buyers.
The announcement of the review calls into question whether Chancellor George Osborne (pictured) will introduce changes to the threshold in his emergency Budget on June 22.
The Tories had previously promoted the policy of increasing the stamp duty threshold, even before the Labour Government’s March Budget temporarily doubled the stamp duty threshold for first-time buyers to £250,000 for this year and next.
It was a manifesto pledge by the Conservatives to make Labour’s temporary increase in the threshold permanent.
However, the Liberal Democrats made no commitments on stamp duty in their manifesto.
The coalition agreement says: “We will review the effectiveness of the raising of the stamp duty threshold for first-time buyers.”
The agreement also says the Government will look to promote shared ownership schemes, whereas the Liberal Democrats proposed to scale back HomeBuy schemes in their manifesto.
The coalition agreement also promises to freeze council tax in England for at least one year and seek to do so for a further year in partnership with local authorities.
Home Information Packs are also to be abolished with immediate effect.
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Readers' comments (5)
Emma | 20 May 2010 12:37 pm
They need to not just look at stamp duty for first time buyers, but sort out the unfair situation of someone buying a property just over the threshhold and having to pay stamp duty on the full amount rather than just the extra. This particularly penalises those in the SE who have few choices under £250K. Not a new idea at all, but when will the politicians listen and do something about it?
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Sarah | 20 May 2010 12:50 pm
I'm due to complete on a house (in the South East!) in mid June before the budget, priced at just OVER the 250k threshold.
I agree with Emma that stamp duty should be looked at as a whole, and not just for first time buyers. Why is there such a huge jump from 1% to 3%, why doesn't the 3% only affect the extra value over 250k or why doesn't it go from 1% to 2%.
The Stamp Duty issue would have lost me the sale if it wasn't for family helping me out - it's not like it's easy to find houses you like out there at the moment!
AND we've already paid tax on the money that's buying the house!
My dilemma is do I hold fire on completion until after the budget???!
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Anonymous | 20 May 2010 1:41 pm
Stamp duty should be charged on an incremental level like income tax where all buyers are treated equally, paying 0% up to £125K, 1% between £125 & £250, 3% on £250K to £500K and 4% over £500k. This would be a fairer system and ensure a property worth £256K would not have to be sold at £250K as is happening at the moment.
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John | 21 May 2010 8:14 am
I feel that a one off concession is a fairer idea a genuine first time buyer being completely exempt up to what is deemed in that region as the cost of a first time buyers' property after that everyone pays.
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Anonymous | 23 May 2010 5:26 pm
I understand the difficulties for first time buyers,and the HIPs being abolished will help generally. HOWEVER,many other sellers/buyers are experiencing paying stamp duty for many reasons. If the market is to be promoted, it needs a fairer playing field.
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