A stamp duty holiday was today unveiled by Chancellor Alistair Darling to help struggling home buyers through the credit crunch. For a period of 12 months, properties worth up to £175,000 will be exempt from stamp duty land tax. This is a temporary raise of the current threshold from £125,000 to £175,000.
The latest house price figures from Nationwide Building Society put the average cost of a home in the UK at £164,654, below the new stamp duty threshold. It will save buyers up to £1,750 when they purchase a house.
Currently, those buying properties between £125,000 and £250,000 pay one per cent in stamp duty. For homes more than £250,000, it jumps to three per cent of the entire purchase price. Homes worth more than £500,000 incur a four per cent rate.
Stamp duty rakes in £6.5 billion for the Treasury - with Londoners paying by far the biggest burden.