Darling gives one-year tax freeze to lower-priced homes in boost for housing market
Chancellor Alistair Darling has this morning temporarily raised the threshold for homes sales incurring stamp duty to £175,000.
The Treasury said that the new exemption will run from transactions completing tomorrow until 3 September 2009.
Stamp duty is at present payable at 1% of the value of the property on all home purchases of more than £125,000. The move follows weeks of speculation about changes to stamp duty rules following a leak to the Sun newspaper at the start of August.
However, the move falls short of the temporary freeze on all stamp duty payments predicted by the Sun.
The move also comes in advance of a major announcement of a package to kick-start the UK housing market, to be made by prime minister Gordon Brown and communities secretary Hazel Blears today at 2pm.
The housing package will include help to bail out homeowners that are struggling to keep up with their mortgage payments, as well as an extension of existing shared-equity schemes to aid first-time buyers onto the home ownership ladder.
The package, rumoured to cost in the region of £1bn, is to be funded by bringing forward money from later years of the 2008-11 three-year spending allocation for the Department for Communities and Local Government.
Homes with a value above £250,000 will continue to pay stamp duty at 3%, and those above £500,000 at 4%.