BUDGET 2010: Stamp Duty threshold will be raised

26 March 2010

Chancellor Alistair Darling has today confirmed that the starting threshold for Stamp Duty will be raised from £125,000 to £250,000 for first-time buyers

The reform will apply for this year and next and will come into effect as of midnight tonight. The Chancellor outlines that the move will help nine in ten first-time buyers.

The levy for properties over £1m will be charged at 5% to compensate for raising the threshold.

The Stamp Duty Holiday had  been in place since September 2008 and lasted until December 31 last year. The starting threshold for Stamp Duty was raised from £125,000 to £175,000.

Until now a levy of 1% of the purchase price had to be paid by those buying a property of over £125,000 and up to £250,000. The tax went up to 3% for properties over £250,000 and up to £500,00 and properties worth over £500,000 were charged Stamp Duty at a rate of 4%.

The Council of Mortgage Lenders (CML) estimated that around 92% of first-time buyers would have been exempt from paying Stamp Duty last year had the starting threshold already been raised to £250,000.