Last year the Labour government announced that it was suspending stamp duty on the purchase of properties up to £175,000 in value.
The measure was put into place in the hope of boosting the property market and making things more affordable for first time buyers, who were struggling to raise the money for a deposit to get onto the property ladder. Previously the stamp duty exemption had only applied to properties up to the value of £125,000, so the threshold was increased by £50,000 on a temporary basis.
The temporary suspension of stamp duty has now come to an end, and once again anyone purchasing a home over the value of £125,000 will now have to pay stamp duty.
However, it has been claimed that when the stamp duty holiday was still in place first time buyers may actually have ended up paying more money than they saved making the stamp duty suspension something of a false economy.
Figures have been released by the Council of Mortgage Lenders showing that in December of last year, just before the stamp duty holiday came to an end, the number of first time buyers reached a two year high.
This was because many were trying to push through their purchases as quickly as possible so that they could benefit from the savings that would come from the stamp duty suspension before the holiday came to an end.
However, the CML figures also show that whilst buyers saved a maximum of £1750 as a result of the stamp duty suspension the average mortgage loan advance was around £5300 more than in November because of the increase in the value of the properties being bought. This meant that buyers paid out a lot more due to price increases than they saved in stamp duty.
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Mortgage loan,
stamp duty,
Taxation,
first time buyer
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