It has been confirmed that the Stamp Duty Land Tax concession for first time buyers will end on March the 24 2012, as planned.
Stamp Duty Land Tax (SDLT) is normally payable when you buy a property for over £125,000, rates vary between 1-5% depending on how much you pay for your property. Under current rules first time buyers who have never owned a property in the UK or elsewhere only have to pay SDLT on properties costing £250,000 or more.
In their 2010 manifesto the Conservative Party had promised to make the current exemption for first time buyers permanent, but recently called the policy "ineffective" at encouraging buyers to enter the market.
In response to the Autumn Statement annoucement, director of the Council for Mortgage Lenders (CML) Paul Smee said:
"It is disappointing to see the government withdrawing the stamp duty concession that currently benefits first-time buyers. While the concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy."
While it may make it more difficult to enter the housing market the difference in cost for a first home should be marginal, and it's worth remembering that those purchasing a new home for under £125,000 will still be exempt from SDLT.
As of March 2012 all buyers will have to pay the equivalent of 1% of the price of the property, so for a £130,000 home, this would be a £1300 one off payment for SDLT. Though this may not discourage many first time buyers, it could casue an extra strain when times are already tough, prompting predictions that there will be a rush to buy in the first quarter of next year. Paul Smee explains:
"It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession."