Stamp Duty Exemption for First Time Buyers ends in March

First Time Buyers of property below £250,000 currently enjoy relief from Stamp Duty, but this concession will soon cease to exist.

First Time Buyers need to act fast

In his Autumn Statement, Chancellor George Osborne confirmed that from the end of March 2012, First Time Buyers would no longer receive this benefit. The usual threshold of £125,000 for 1% Stamp Duty exemption will remain in place for all home buyers.

Nevertheless, the move represents a significant disappointment for many “first timers” striving for a tenuous foothold on an ever more slippery property ladder.

Stamp Duty Thresholds

Prior to 25th March 2012:

1% Stamp Duty to be paid for purchases from £125,000 up to £250,000

First Time Buyers – exempt for sales up to £250,000

3% for £250,000 up to £500,000

4% for properties over £500,000

5% for residential properties over £1,000,000

From 25th March 2012*:

1% Stamp Duty to be paid for purchases from £125,000 up to £250,000

First Time Buyers – No longer exempt

3% for £250,000 up to £500,000

4% for properties over £500,000

5% for residential properties over £1,000,000

*Effective last date for completions, visit HMRC for more detail

A lifeline, or a failed experiment?

The government’s statement confirmed that the relief had been “ineffective” in stimulating property sales to first time buyers, but that will be small comfort to buyers saving and intending to purchase their first home in 2012.

Paul Smee of the Council for Mortgage Lenders argued that:

“[First Time Buyer Exemption] was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.”

The broader housing strategy announced by the Government to mitigate the impact of the scheme’s removal includes a range of other measures, intended to encourage growth in the stagnant property market. These changes place emphasis on both effectiveness across the whole market, and value for money, and include a 95% mortgage scheme for buyers of new-build residences.

First Time Buyers must act now

There is a chance that First Time Buyers' Stamp Duty exemption may remain in place if the government revise their position before March, but many First Time Buyers simply cannot afford to wait and take that chance. 1% on an eligible property can exceed £2,000; money homemovers simply cannot afford to waste.

If you are a First Time Buyer and need urgent advice on this issue, call our specialist team on 0330 660 0286, or Click here to email Fridaysmove today.