Non first-time buyers slapped with £999 tax charge but 'can escape it'

A tax perk for buyers could save them cash as house prices continue to fall. The decline in hosue prices mean more and more buyers are exempt from stamp duty, which starts at £250,000, before increasing through the thresholds depending on property purchase price.

There is currently a special dispensation for first time buyers, who pay no stamp duty on a property up to a value of £425,000 and a reduced rate of 5 per cent on those priced at £425,001 to £625,000. For non-first-time buyers buying a £260,000 property, they risk having a stamp tax bill of £500.

For a £270k property, this doubles to £999. My Home Move Conveyancing said: "With the average buyer in England now paying £297,735 for a home, their purchase will unfortunately come with the additional cost of stamp duty.

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"However, there are five regions of the nation where the average house price still comes in under the £250,000 threshold - the East Midlands, North East, North West, West Midlands and Yorkshire and The Humber.

"Further analysis of the market at local authority level shows that while the odds are against you, a third (33 per cent) of all local authorities are still home to an average house price that would see you pay no stamp duty."

Director of My Home Move Conveyancing, Alistair Singer, said: "Stamp duty has long been a thorn in the side of the nation’s homebuyers and a further financial hoop they need to jump through before they can proceed with their plans to purchase.

"We saw the market boom that came about as a result of the previous stamp duty holiday and so it’s clear that its abolition would bring a sizable boost to market activity, a boost that is arguably much needed at present as the market continues to find its feet following the lull spurred by higher interest rates.

"There has been one silver lining to the cooling market conditions of the last year though, as a handful of areas have seen the average cost of a home slip beneath the initial stamp duty threshold of £250,000. We should also remember that First Time Buyers are exempt from stamp duty for purchases up to £425,000 and stamp duty is a progressive tax rather than a slab effect which means you only pay the higher rate on the additional amount above certain thresholds.

"That said, with just a third of local authorities remaining stamp duty exempt, the chances are that you’ll have to be prepared to pay more to the government when you do come to buy.”