Stamp Duty Breakthrough

by Melanie Cosgrove

Head of Property Law Department at Widdows Mason

It has been announced that with effect from the 3rd September 2008, Stamp Duty Land Tax will suspended for a year on properties that cost less than £175,000 in a bid to boost the ailing housing market.

Presently Stamp Duty Land Tax is payable on properties where the purchase price is £125,000.01 and above at the rate of 1% of the purchase price. The level of duty payable increases at £250,000.01 to 3% of the purchase price. For properties being purchased at over £500,000.00 duty increases to 5% of the purchase price.

The announcement will mean an immediate saving of up to £1,750.00 for Buyers.

Other incentives announced will include an opportunity for first time Buyers with a household income of less than £60,000 to buy newly built properties with an equity loan of up to 30% of the property's value.

Finally, it is proposed that a scheme will be introduced to help people who are unable to keep up with Mortgage repayments on their home due to the worsening economic climate. It is proposed that Lenders would be able to "buy back" a share of the property, to ease the strain in making repayments, and the owners will be able to "rent back" that share of the property.

With Mortgage lending decreasing, more people are finding themselves at risk of repossession or falling into negative equity as they are forced to sell their property at a loss, and it is these people the scheme aims to help.