Following the announcement that the stamp duty exemption for first time buyers is to be increased from £125,000 to £250,000 in terms of the value of the property it has been revealed that around seven out of ten homes will now fall under the stamp duty exemption threshold for first time buyers. Data from the property website Right Move shows that there are now 70 percent of properties that will be eligible for stamp duty exemption for first time buyers, whereas previously, when the exemption limit was £125,000 this percentage of exempt properties was only 25 percent.

The Chancellor of the Exchequer, Alistair Darling, recently announced in the pre-election budget speech that first time buyers would now be able to avoid paying stamp duty on properties up to the value of £250,000, which is double the standard exemption value of £125,000, which applies to other buyers. Darling also announced that in order to fund this new measure wealthier people that were buying homes worth £1 million or more would have to pay increased stamp duty of 5 percent, which would mean a minimum stamp duty of £50,000.

The Right Move research showed that out of the homes on the market at present only 2 percent fell under the price category of £1 million or above, so only a small percentage of buyers would be affected by the increased stamp duty rate whereas many first time buyers would benefit from the increased threshold for stamp duty exemption.

An official from Right Move stated: “This welcome initiative removes the majority of properties for sale from the clutches of a somewhat restrictive tax for the UK property market, giving a welcome boost to the important spring market. A massive 70% of properties for sale are now tax-free for first time buyers. However, sellers may feel they have to negotiate less with a buyer who is now a couple of thousand pounds better off, which could blunt the benefits of this stamp duty holiday.”

Tags: minimum stamp duty, time buyers, home value, price category, stamp duty, small percentage