First time buyers should move quickly in the New Year as the Government's stamp duty exemption comes to an end in March.
When buying a new home, you need to pay stamp duty (or Stamp Duty Land Tax to give it its full name) as a percentage of the value of the property you’re buying. There’s no stamp duty on properties worth £125,000 or less, but over that it’s charged at 1% and then 3% over £250,000.
In March 2010, the Government announced a stamp duty exemption for those buying their first home, up to £250,000 – saving homebuyers up to £2,500. The aim of this was to try and help more first time buyers on to the property ladder and in turn give a boost to the housing market overall.
This was a temporary exemption and the Government has recently confirmed that it’s due to end on 24th March 2012 – around four months from now. After this, the standard £125,000 threshold will apply again to first time buyers – bringing back the 1% tax band.
If you’re in the process of buying your first home, be aware of the deadline as completing by the 24th March could save you up to £2,500.