News

On 9 December 2009 the Chancellor Alistair Darling announced in his pre-budget report that the current stamp duty holiday would come to an end on 31 December 2009.

From 1 January 2010 stamp duty would again be levied on properties worth more than £125,000 and not just those above £175,000 as at present.

The stamp duty holiday began in September 2008 and meant that anyone buying a property worth £175,000 or less avoided paying 1% tax. This in turn meant that purchasers could potentially save up to £1,750.

The Council of Mortgage Lenders (CML) have reported that since the holiday began approximately 132,500 house purchase transactions involving a mortgage have escaped paying tax. This accounts for more than a quarter of the 486,400 house purchase loans in the period.

It had been hoped that the holiday would be extended or made permanent and there are fears that the news may cause the housing market to slow down. This would be disappointing given that house prices appear to be steadying and in some cases even rising. The news will also be disappointing to first time buyers looking to get a foot on the property ladder.

As from 1st January 2010, the stamp duty rates are as follows:-

125,001 - £250,000 1%
£250,001 - £500,000 3%
£500,001 & over 4%

For more information regarding stamp duty or other residential property issues, please contact Michael Storey michaelstorey@samuelphillips.co.uk