A stamp duty holiday, but only for some
In his last Budget before the election, and presumably the last of this Labour government, the chancellor has outlined important changes to stamp duty. From 25 March first-time buyers purchasing houses worth up to £250,000 will pay no stamp duty. The holiday is scheduled to last two years.
On the other hand, Mr Darling also proposed an increase in stamp duty on properties worth more than £1m, but this will not come into effect for some time.
The move is a generous one from the chancellor, but he makes up for this by being very precise about what exactly constitutes a first time buyer. According to the Treasury, a first-time buyer is classed as someone who has not previously owned a property ‘anywhere in the world’.
This means that if you don’t own your own home at the moment but you have in the past, then you are not eligible to take advantage of the stamp duty holiday.
Those who are eligible only need to complete their sale between 25th March 2010 and 25 March 2012 and they will not pay any stamp duty. This means that people who are already mid-way through the process of buying a house can still take advantage of the scheme.
Unfortunately, this means that any first time buyers who have recently completed the purchase of their house will not be able to reclaim the stamp duty paid.
Things get trickier if couples are buying together and one of them does not qualify for the scheme because they have owned property before. The guidance clearly states that in these cases stamp duty will have to be paid. However, if the purchase is made in the name of only one member of the couple then stamp duty can be avoided.
On the one hand it must be said that this stamp duty holiday will be a real boost to those eligible and counter-balance some of the difficulties of getting mortgages and saving up large deposits required by the current economic climate.
On the other hand, however, this is little more than a cynical political ploy by a shrewd chancellor sitting in the heart of an unpopular, discredited and almost certainly doomed government. The strict criteria by which ‘first-time buyers’ are assessed are unnecessarily stingy, to the disadvantage of couples buying together.
Similarly, the scheme will be paid for by an increase in the stamp duty for more expensive houses, but this will not come into effect until after the election. I hope as many people as possible benefit from this scheme, but not the sneaky and cowardly government that hopes to use it to buy the votes of the disadvantaged.
