Money News
Despite (long-shot) hopes that Stamp Duty tax bands would be raised to take account of house price inflation over the last decade the Chancellor abjectly failed to deliver for most homebuyers - save for the estimated 95,000 people able to buy their homes through shared equity schemes. These individuals won't be required to pay Stamp Duty until they own 80% of the equity in their homes. Previously, these schemes were only available to buyers able to raise three-quarters of the cost of a property. This will now be lowered to 50%.
The Government initiative is part of a wider commitment to spend £8 billion on affordable homes over the next 3 years - the Chancellor using the Budget to announce that 70,000 new homes would be built on public land this year, following a review of public sector availability. This comes in addition to the 40,000 already under construction.
For the rest of us, who may be considering moving, it's a case of as you were. The number of properties in the higher stamp duty bands has increased dramatically in the past five years. Indeed, the number of properties in the UK valued above £250,000 increased by 201% from 1.8 million in 2002 to 5.5 million in 2007.
The Government made a positive move in the 2005 Budget to raise the lowest stamp duty threshold from £60,000 to £120,000, which benefited many first-time buyers. The lower threshold was further raised to £125,000 in March 2006.
The current £250,000 and £500,000 stamp duty bands, however, have been in place since July 1997. Moreover, since then the percentage charge on properties in the £250,000 to £500,000 band has doubled from 1.5% to the 3% currently. For properties above £500,000 it has similarly doubled - but from 2% to 4%.
12 March 2008 © Moneyextra.com
Moneyextra.com recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.