Homes worth £175,000 or less are to be exempted from stamp duty for 12 months as part of a package to revive the housing market, the Chancellor announced today.
The change, which comes into effect tomorrow, raises the threshold on which 1% stamp duty is paid from its current level of £125,000.
The move means anyone buying an averaged priced house is likely to avoid having to pay the tax, relieving some of
the pressure on hard-pressed first-time buyers.
It will save eligible home-buyers up to £1,750.
In a statement, the Treasury said: "The Chancellor of the Exchequer has today announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.
"This will provide an exemption from stamp duty land tax for land transactions consisting entirely of residential property where the chargeable consideration is not more than £175,000.
The Treasury estimates that the one-year stamp duty freeze will cost the Government £600 million – suggesting that it expects about half a million home-buyers to benefit from the change.
The latest house price figures from Nationwide Building Society put the average cost of a home in the UK at £164,654, below the new stamp duty threshold.
The Halifax, the UK's biggest mortgage lender, welcomed the announcement. A spokeswoman said: "This is a sensible measure and it will help the housing market."
But the Council of Mortgage Lenders said the move did not go far enough.
Spokeswoman Sue Anderson said: "It is questionable whether it will incentivise buyers who wouldn't have entered the market anyway."
The full article contains 280 words and appears in Edinburgh Evening News newspaper.
