Calls to extend stamp duty concession for first-time buyers

Key Points

• First-time buyer relief to end in March

• But housing industry calls for extension

• Govt says relief hasn't encouraged first-time buyers

First-time buyers purchasing properties that cost between £125,001 and £250,000 do not have to pay the property tax but the amnesty, which began in March 2010, only applies until 24 March 2012. No-one pays the tax on properties that cost £125,000 or less.

The Autumn Statement released yesterday said analysis shows the tax relief has been ineffective in increasing the number of first time buyers.

Calls have previously been made by the housing industry to extend the relief or risk distorting the already fragile market, where the proportion of first-time buyers is already at a three-year low.

'Government needs to do more'

Building Societies Association director-general Adrian Coles says: "It is disappointing the Government has decided not to extend the stamp duty holiday for first-time buyers on properties under £250,000."

He says that despite the recent, welcome housing strategy announcements which include plans to encourage more lenders to offer mortgages to those with a 5% deposit "it feels as though the Government is giving with one hand, while taking away with another".

Wendy Evans-Scott, president of the National Association of Estate Agents, says: "We were disappointed to see the first-time buyer holiday for stamp duty is not being extended beyond March 2012.

"As such, the Autumn Statement fails to provide much comfort to the property market. First-time buyers are the lifeblood of the market, and our recent data shows the number of first-time buyers has reached a three-year low.

"With the stamp duty holiday disappearing from next March, the Government will need to do more to help the fragile first-time buyer market."

Stamp duty rates

The current standard rates of stamp duty land tax are as follows:

• Properties worth £125,000 and under: no stamp duty.

• Properties between £125,001 and £250,000: 1% tax on entire property value (waived for first-time buyers until 24 March 2012).

• Properties between £250,001 and £500,000: 3% on entire property value.

• Properties between £500,001 and £1m: 4% on entire property value.

• Properties over £1m: 5% on entire property value.

Additional reporting by the Press Association.