The Chancellor Alistair Darling has announced that stamp duty will be scrapped on properties sold for £250,000 or less in his Budget today.
This follows a previous stamp duty holiday, which saw this tax temporarily suspended on sales of properties up to £175,000 from the beginning of the 2008 tax year until the start of 2010.
The Chancellor said that the stamp duty holiday helped 260,000 people to get on the property ladder, before the threshold returned to £125,000.
Today's announcement therefore sees the stamp duty threshold doubled, indefinitely, to help first time buyers to realise their dreams of homeownership. According to Mr Darling, nine out of 10 first time buyers will now pay no stamp duty on the purchase of their first home.
This is Alistair Darling's final Budget before the general election, but the announcement on stamp duty will come into force regardless of the result of the election, as it is similar to the Conservative's existing policy on stamp duty.
Meanwhile, those homeowners buying properties worth more than £1million will have to pay five per cent stamp duty; previously, properties of £1million fell under same threshold as those worth more than £500,000, and were liable for four per cent stamp duty.
The Chancellor also said that to help existing homeowners to keep up with their mortgage payments and avoid repossession, the Government's mortgage scheme – which has already helped 220,000 borrowers – will be extended for a further six months.
Responding to the Budget, Conservative leader David Cameron accused Labour of copying Tory policies which they had previously denounced.
Drew Wotherspoon, director of marketing at independent mortgage broker John Charcol, said "The news today that the chancellor is abolishing stamp duty land tax for all first time buyers up to £250,000 is excellent for a group of buyers who have been desperately bereft of reasons to smile for many, many years. The move will undoubtedly help many people achieve home ownership and we need only look at the recent extension to £175,000 for proof of this."
But, he added: "Of course, the devil is in the detail, and policing this may prove to be a tricky task."
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