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BUDGET 2010: Darling could increase stamp duty threshold to £250,000

Chancellor Alistair Darling could abolish stamp duty on house sales of up to £250,000 for first-time buyers when he delivers his Budget speech today.

Darling announced in his pre-Budget report in December that the stamp duty holiday, which increased the threshold at which buyers paid stamp duty stamp from £125,000 to £175,000 between September 2008 and December 2009, would not be extended beyond the end of last year.

However, the BBC is reporting this morning that Darling may push back the threshold, meaning a first-time buyers would not have to pay stamp duty on house purchases up to £250,000.

The stamp duty holiday has been credited with stimulating the housing market and advisers have been calling on Darling to raise the threshold permanently.

Earlier this week in Money Marketing’s Budget hopes and fears, Churchill Investments director Chris Gilchrist said: “The stamp duty holiday for the first-time buyers obviously did work so let’s get rid of it completely. I think then we would definitely see a good effect on the first-time buyer property market.”

Clayden Associates Ltd director Daniel Clayden said: “I think what they did with regard to the stamp duty having the higher threshold was a success and I think if they introduce something like that again it would be good news for first time buyers which would obviously help to stimulate the property market.”

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. As someone with their flat on the market at the moment this would be most welcome news as it means we don’t have to accept a derisory offer just because it comes under the threshold. Fingers crossed.

  2. 1% Stamp Duty is not the problem – its the 3% mark. Lots of properties fall into the £250-275k bracket, but don’t get sold because buyers do not want to pay an extra £5k in Duty just becasue they are paying an extra £10k on the prroperty. Sellers are unhappy because they do not feel that they should knock around £15k off their property if it is worth around £265k.

    I know it means a lot lost in tax, but taper the bands so that you pay 1% up to a level and then 3% on balances prevailing and so on. Surely this would be fairer.

  3. Another too little too late from a poor Government with a bad leader and an even worse Chancellor!

  4. Good news but the structure of stamp duty is still a problem – a progressive tax (wokring like income tax bands) would reduce the distortion caused in house prices at £250k, £500k.

  5. MIKE FITZGERALD 24th March 2010 at 9:54 am

    raising the Stamp Duty starting level to £250,000 is a good way to help first time buyers and to bring some slight relief to the housing market
    I also feel that there should be a complete overhaul of the way the Tax is paid,It should be paid in a graduated way as is income tax

    thes two measures would help home buyers and the wider economy

  6. First Time Buyers, how do you prove that, everybody who has been out of the market for a year will believe they are a first time buyer, make it for every purchase up to £250,000, it would need to be implemented immediately, as it would stall the market, what little there is if it started later on in the year. Tapering the duty from £250k to £300k would also be a good boost, as there is a gravitational pull back down to £250k.

  7. Increase in lower stamp duty threshold would be most welcome as I am currently in the market for my first house (and you’re luck to get a house boat for under £125K in Surrey!). Although it will only help if it is actioned as of 6th April 2010.

    I do agree though that how the tax is paid needs a reform. It would be better for the tax to be paid not on the whole amount but on the amount above a certain level, eg first £250,000 is not taxable, then the % tax only paid on the amount paid above this, not 1% on the total amount.

  8. The burden is on the buyer at present. Why not switch it to the vendor with a flat rate of say 2.25% across the board. Negative equity is an issue but it would be fairer than a purchase tax.

  9. So will this just be for first time buyers? Or will it apply to everyone?

    Could boost housing activity a bit, but not if its only applicable to FTB’s.

  10. There are several issues here. Not only FTB’s need help here but with a soring divorce rate in this country the spouse who has to leave the matrimonial home is severely dissadvantaged and should be considered along with this proposal.
    The other issue is that stimulating the market now, although welcome will not reduce the value of properties, which I believe are still overpriced, especially in the Capital.
    What would help is that BTL properties are taxed at 3% minimum, across the board and that would reduce the speculators artificially inflating prices making it difficult for FTB and Divroced buyers purchasing.

  11. Derek Snowden | 24 Mar 2010 9:47 am

    Another too little too late from a poor Government with a bad leader and an even worse Chancellor!

    ‘What a stupid uphelpful comment from the person above’ Be a little more informative with your comments, or is that the limit of your ability?’

  12. does this stamp duty only apply to first time buyers?

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