In an attempt to stimulate the housing market, first-time buyers will now not have to pay Stamp Duty on purchases of up to £250,000 from midnight tonight. It will apply for 2011 also.
In his pre-Budget report in December, Darling said the Stamp Duty holiday would not be extended beyond the end of 2009. The holiday had increased the threshold at which buyers paid Stamp Duty from £125,000 to £175,000 between September 2008 and December 2009.
The Council of Mortgage Lenders has estimated that if the £250,000 threshold had existed in 2009, 92% of first-time buyers and 69% of movers would have been exempt.
The trade body also predicted that approximately 350,000 households (including cash buyers, not just those with mortgages) could benefit over the rest of this calendar year, at a cost to the Government of around £630m.
The cut for first-time buyers will be paid for by a hike in Stamp Duty to 5% for properties worth more than £1m.
