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Darling to cut out lower stamp duty limit

Stamp duty on house sales of up to £250,000 to go

Mortgage help for people facing repossession

Mortgage help for people facing repossession

Alistair Darling MP announced that stamp duty for all house sales of up to £250,000 is to be scrapped. The removal of the lower stamp duty threshold is designed to make it easier for first-time buyers to step onto the property latter.

The Chancellor used his third budget, and the last before the General Election, to remove the lower band of stamp duty, which has proved a significant barrier for people looking to buy their first home. Mr Darling said the move would double the stamp duty threshold for first time buyers from £125,000 from ‘midnight tonight for this year and next’. 

Darling alters stamp duty limit

By scrapping stamp duty on properties being sold for up to £250,000, the government hopes to generate more house sales at a time when the mortgage market is particularly flat. Figures just released reveal that the number of approved mortgages totalled £2.8 billion in February, down on the six-month average of £3bn. 

The mortgage market has been suppressed so far this year, not least because the stamp duty threshold reverted to £125,000 from £250,000. According to the Council of Mortgage Lenders if the £250,000 starting threshold for stamp duty had existed in 2009, around nine-in-ten first-time buyers would have been exempt from paying.

5% stamp duty on £1m properties

The chancellor also announced that stamp duty would rise to 5% for houses sold for £1 million, from April 2011.

For more information on mortgages, see the Which? homeowner advice guide.

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