Time running out for first-time buyers to save stamp duty

Thursday 26th January 2012

Estate agents have issued a reminder to all first-time buyers that the Government's holiday on Stamp Duty Land Tax will come to an end in two months' time, on 24 March 2012.

NAEA President Wendy Evans Scott said: "With only two months remaining, first-time buyers must act quickly to avoid paying Stamp Duty Land Tax on their first home purchase.

"If you're currently in a chain and waiting to complete your purchase then make sure that others in the chain know about the end of the tax holiday too. Good communication with your solicitor can help move the process forward, helping you beat the 24 March cut-off."

After the tax exemption has come to an end FTBs will face a tax of 1% on house purchases between £125,000 and £250,000, and a 3% tax on purchases over £250,000.

The NAEA's recent figures show that the number of sales to FTBs edged up during November and December from 19% to 21% of sales per branch. However FTBs still represent a low percentage of overall property sales, and NAEA data shows the number of first-time buyers getting on to the housing ladder hit a three-year low in October, at just 16% of sales.  

Evans Scott said: "First-time buyers are key to a healthy property market. We hope to see the number of people completing the purchase of their first home continuing to increase through February and March, as many FTBs are keen to purchase their first home before the tax exemption deadline.

"However, it is impossible to predict what impact the end of the tax exemption will have on first-time buyers, particularly those on very tight budgets of under £250,000 for whom the 1% could be disastrous. The Government will need to monitor sales closely and consider other action to support the fragile first-time buyer market."

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Mike Jones