News and Press releases

How first time buyers can lick stamp duty

22/09/2009

The government raised the level at which stamp duty kicks in from £125,000 to £175,000 in the last Budget in an attempt to make property cheaper for those buyers at the lower price end of the market – particularly first-timers.
With the threshold scheduled to revert to £125,000 after midnight on 31 December buyers do not have much longer to take advantage of the tax break, given the time required to complete an actual purchase. Any property transaction over £125,000 that has not been ‘stamped’ by midnight on 31 December, will be subject to 1 per cent duty, which is paid for by the buyer.
Thus, from 1 January next year, 1 per cent duty will again apply on all sales over £125,000 and below £250,000. This means, for example, that if a buyer has agreed a price of £174,500, he or she will save £1,745 if the purchase is completed before midnight on 31 December.
For people on a tight budget this is a substantial saving. Depending on location, a substantial number of traditional one- or two-bedroom flats in Scotland come within the £125,000-£175,000 price category, as do thousands of former local authority houses.
I wouldn’t specifically advise anyone to purchase a flat or house simply on the basis of saving on stamp duty. Nevertheless, the forthcoming stamp duty change does provide an incentive for anyone seriously interested in buying a property to do so sooner rather than later. However, whether buyers will still be able to take advantage of the tax break depends on the lending criteria of banks and building societies, which stills seems to be tight.
Further information: www.djalexander.co.uk

Scottish Property Insight, 22 September 2009

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