No stamp duty until property costs £175,000

02 September 2008

Government increases stamp duty threshold by £50,000

For the next 12 months homebuyers will not have to pay stamp duty on properties costing £175,000 or less.

The move will be made from Wednesday and will see the current £125,000 threshold increase by £50,000 with the aim of kick-starting the housing market.

A homebuyer choosing a property costing £175,000 will save £1,750 after the introduction of the scheme, which is set to cost the Treasury around £600m.

According to government estimates half of all property purchases will now be free of stamp duty. This is an increase of a third compared to when the threshold was £125,000.

The government has also announced other housing moves, including:

First time buyers of new properties in England will be eligible for “free” five-year loans of up to 30% of a property’s value.
More power for councils and housing associations so that they can pay off debt belonging to homeowners who can no longer manage to make their mortgage repayments and then charge them rent so they can continue to live in the property
Reducing the period before Income Support for Mortgage Interest is paid by two-thirds from 39 weeks to 13 weeks

Unlike the stamp duty move, the funding for these above measures will only apply in England.