Act now to Avoid Stamp Duty on Buying a Home
02 Nov 2009 Tell a Friend
Since September 2008, the government has waived Stamp Duty on all
properties valued at £175,000 or less. This temporary increase to the
allowance (previously £125,000) was aimed at encouraging potential
homebuyers onto the property following the crash of the property market.
Over this period, it's been estimated that the government have
forfeited more than £274 million on Stamp Duty earnings, based on the
174,000 house purchases that have been completed over the same time
period.
On 01 January 2010, the threshold for paying 0% Stamp Duty is due to revert to the previous limit, although the
Chancellor, Alistair Darling, has not ruled out a continuation of this
change. Whatever happens in the new year, if you are in the process of
buying or selling a home, you will still be able to benefit from the
Stamp Duty lower limit increase, and save up to £1,750, by completing
on the property sale by the end of this year.
Estate agency Nottingham Property Services, the property broking arm of The Nottingham Building Society is urging anyone in the process of selling a property worth £175,000 or less to hasten along the sale to ensure that the buyer will not be hit with Stamp Duty charges.
Lorraine Giddings, Head of The Nottingham's Branch network said of the uncertainty surrounding the Chancellor's final decision, "On one hand the Government is in a difficult position as it needs the revenue that is generated from Stamp Duty. On the other, the housing market is at the beginning of a long road to recovery and any decision to reintroduce Stamp Duty could hinder progress.
"In my opinion, the Chancellor is going to have to do something - but second-guessing which decision he will make could prove very hard. That's why we are recommending to people who are serious about selling their homes that they should act decisively now." The Bank of England recently published figures showing that the number of mortgage approvals is increasing, due to a combination of growth in homebuyer confidence and a greater availability of first time buyer mortgage products in the market.
Stamp Duty is the tax that that is charged when you buy property, and the amount that you pay is dependent on the value of the property you are purchasing, with the highest level of 4 per cent payable on properties valued at £500,000 or more. There are a number of ways in which potential homebuyers are being courted in the wake of the housing market decline. Many mortgage lenders are offering free valuations and waiving legal fees, in an attempt to minimise the financial burden of buying a property for those with limited capital.
For those looking to sell their property, this could therefore be an opportune moment. £1,750 is a significant saving when there are so many other costs involved, and this Stamp Duty window could therefore provider potential buyers with the incentive they need to make the step. Giddings added, "My advice to someone who has decided to sell is ?get on with it!' Providing the house is in reasonable condition, there are a lot of people out there who are seeking homes in the region with a price tag of £175,000, or less."