Return of Stamp Duty tax looms for first time buyers

People thinking seriously about buying a home on a shared ownership basis are being urged to move fast to secure a property before the government’s Stamp Duty exemption on homes costing below £175,000 expires at the end of the year.

“Anyone completing a property purchase in the £125,000-£175,000 price range will have to pay 1% Stamp Duty after 31st December 2009,” said Marilyn DiCara, director of sales and marketing for Moat, the Government’s HomeBuy Agent in Essex, Kent and Sussex. “That will mean an extra upfront cost of between £1,250 and £1,750 for buyers, depending on the exact price of the home they buy.

“Given that a normal house purchase takes around three months to go from agreed sale to completion, we would urge first time buyers thinking about getting onto the property ladder to find a home by around the end of September or early October to ensure they have time to complete the purchase before the Stamp Duty exemption disappears.

“As the HomeBuy Agent for all government-backed affordable home ownership schemes, we can point first time buyers to a large range of shared ownership homes priced under £175,000 throughout Essex, Kent and Sussex. There are some great deals on offer at the moment, and with house prices starting to rise again this could be the perfect time to buy while keeping the upfront costs to a minimum.”

The normal threshold for paying Stamp Duty on home buying is £125,000. The government increased this to £175,000 for a limited period as part of a package of measures designed to stimulate the economy and housing market as the recession took hold. However, the threshold will revert to £125,000 on 1st January 2010.

Marilyn DiCara said “For many first time buyers raising the deposit and finding the money for the upfront costs of house purchase is more difficult than paying the mortgage month to month. This is a one-off opportunity to keep those initial costs down, giving buyers extra to put towards the deposit or furnishing their first home. But people need to act fast.”

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