UK stamp duty ditched below £175,000

Stamp duty has been scrapped for a year on UK homes with a price below £175,000 in an effort to help the struggling housing market.

The increase, which comes in on Wednesday, effectively sees the one per cent tax limit raised from a previous price level of £125,000.

Government ministers also unveiled free-of-charge loans for first-time buyers as part of a package of measures designed to get people buying again.

Communities secretary Hazel Blears told BBC Breakfast:

“My package today is absolutely about helping those decent families struggling with their mortgages so they don’t find themselves out on the streets.

“[It's also about] Getting first-time buyers into the housing market and trying to deal with people who want rented housing. I don’t think it’s right that the government just stands on the sidelines and lets people go under – I want to help keep them afloat.”

The announcement puts an end to a month-long whirlwind of speculation over the future of stamp duty.

Press reports on a possible ‘holiday’ from the tax were at first denied by the Treasury, but officials later backed down from saying such a measure was not on the cards.

Estate agents and industry experts say the confusion damaged the market, with buyers pulling out of deals.

The free loans initiative will apply to families earning less than £60,000 and give up to
30 per cent for five years on new homes. An unspecified fee will be charged after the five year period.

Part of the £1 billion package also includes help for households struggling to meet mortgage repayments.

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