Stamp duty holiday ends, replaced by New Buy Guarantee

 
A woman looking at properties in an estate agent The stamp duty holiday was introduced in 2010 to help first time buyers

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The stamp duty holiday for first-time house buyers has ended, meaning they will join others in paying 1% tax on properties worth more than £125,000.

The government says it ended the holiday because it had been ineffective in helping people to buy.

It is introducing a New Buy Guarantee scheme instead, which it says will be better at getting people on to the housing ladder.

The stamp duty holiday was introduced in 2010.

It allowed first-time buyers to save up to £2,500 on the purchase of their first home by exempting them from stamp duty on homes worth up to £250,000.

Under the New Buy Guarantee, the government and major house builders will guarantee part of the loan from banks to first-time buyers.

This is intended to help those with smaller deposits to get on the housing ladder.

The government also announced a new 7% rate on homes over £2m last week.

And it further outlined a clampdown on stamp duty avoidance at the higher end of the market.

 

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  • rate this
    +1

    Comment number 33.

    24.Violet Mildred

    Or you could change the Pensions System rules and regulations to make them more attractive which would immediately place a lot of current BTL properties up for sale and reduce the price of starter properties.

    BTL became popular because Pensions were made unpopular. Restore the Status Quo and everyone will benefit.

    Another Brown failure.

  • rate this
    +1

    Comment number 32.

    We need to tax the profit generated from the Sale of your house minus what you paid. You make a big profit on the sale, then why should you get to keep all that filthy profit tax free. This is the only way to bring prices in line and prevent these absurd price bubles. The money grabbing Landlords will soon release their stock of houses.

  • rate this
    +1

    Comment number 31.

    #29. Tio Terry

    You've answered your own question. Councils' & housing associations (charitable organisations) are completely different to BTL Landlord's and Companies who's business model & raison d'etre is to buy and let properties for a profit.

    Therefore you can differentiate on those lines.

  • rate this
    +1

    Comment number 30.

    To help the housing market, and in particular to help people buying for their own permanent occupation, a re-introduction of mortgage interest relief at source (MIRAS) would be a way forward. Regrettably it was scrapped by that idiot chancellor Gordon the Drongo in 2000 because he said it was a middle class perk! House prices do need to realign but a crash in value would do more harm than good.

  • rate this
    0

    Comment number 29.

    26.Ragnarokkr

    How would you differentiate between a BTL Landlord, a Council - who are also Landlords - a housing association and a Company who's business was to buy and let properties for a profit? What is the difference between them in your view?

  • rate this
    0

    Comment number 28.

    If as the ysay it was not effective because people didn't take it up then obviously the discount was'nt big enough. Tax rate for those on £150k too high government lowers is property for first time buyers not affordable government increases tax. We of course are all in it together. ( I have already paid off my mortgage so it doesn't affect me).

  • rate this
    0

    Comment number 27.

    Anybody on below average wage has no chance of getting on the property ladder, even in the cheapest areas, this government talks alot but does nothing to actually help this situation.Its time to admit that the right to buy schemes over the years has depleated the council stock to near nil and given private rental housing a boost in rental, making it harder for people to save for a deposit.

  • rate this
    +1

    Comment number 26.

    Proper taxing of second homes & buy to let properties is the way to go. It's these factors that have done most to push up house prices. It needs to be far less attractive, so use these instances to raise taxes for the exchequer, instead of hitting everywhere else with cuts.

    You only need one home to live in, but everyone needs a roof over their heads.

  • rate this
    +2

    Comment number 25.

    22.Ben

    Not quite true. Only those who have a lond distance to travel can claim for a second home. My MP, who lives in Ashtead, is not allowed to claim - and quite rightly to. I can understand that if your constituency and main home is in Newcastle or Bristol etc. you cannot travel daily. I don't think it's unfair for the state to pay for that when you are working for them.

  • rate this
    +4

    Comment number 24.

    21 Madhatter

    Agreed. Since Gordon screwed up the pension industry people started gambling with house buying and too many houses have become second homes, student lets, holiday lets and buy-to-let. This has inflated the lower end of the housing market, disadvantaging those seeking to buy their own home. This could be redressed in the tax system, eg; double stamp duty if it is not a permanent home.

  • rate this
    0

    Comment number 23.

    This government is utterly determined to keep property turning over at bubble prices while the media do their best to whip up buying hysteria. And all for what? What if you're suddenly blighted by a bad neighbour or sewage farm planned for the end of your street? You've lost. I even suspect the gov of avoiding the obvious right now: rent controls, because they'd undermine this tax-rich market.

  • rate this
    -1

    Comment number 22.

    Because MPs get their mortgage paid to live in Westminster all have 2 or more homes. I think taxing second homes is the one thing all parties agree on.

    And the media won't pull them up on it because "many of the 40-plus media classes are totally bought into BTL too" (Faisal Islam Ch4 News business correspondent)

  • rate this
    +2

    Comment number 21.

    Houses where I live have been made so expensive because of the second home buyers. Houses stand empty for 40 weeks a year and local people have to move miles away to buy a home, shops close and public services are cut. In some places over 50% of houses are holiday homes.
    Do we have a housing shortage? No
    Are house prices over inflated? Yes
    Proper taxing of second homes would help.

  • rate this
    +4

    Comment number 20.

    Distorting markets is a dangerous game, but with the housing market I think buyers who buy to live in the property should be advantaged by comparison to buy-to-let and second/holiday house buyers. Mortgage interest relief at source used to help and it would be worth looking at this again.

  • rate this
    -2

    Comment number 19.

    Fair enough. We've subsidised these buyers for a while. They're also blessed with mortgage rates at the lowest they've been in the past 50 years. Perhaps time they were gently awakened.

  • rate this
    +1

    Comment number 18.

    Next stage: Old people's houses commandeered by greedy old folk homes to fund fees, let out at great profit and not available to owner occupiers, likewise btl landlords taking all the lower priced properties because they have the deposit money. Market is alive between these landlords, but the rest of us are excluded unless downsizing. ftb has no chance, and pays more in rent than mortgage.

  • rate this
    0

    Comment number 17.

    12.gsum

    "...I'm older, a home owner and I want to see house prices crash. Houses are for living in - not an investment..."

    ===

    If by "crash" you mean a steady reduction until down by about 30% in real terms, then that's also my position and view.

    A sudden large fall would however, damage the whole economy, probably.

  • rate this
    +1

    Comment number 16.

    House prices went nuts 15 years ago. They are probably too high by about 30%, but there won't be a crash because:
    1. The majority of home owners are ordinary folks and couldn't afford to take a 30% loss. Banks wouldn't lend them to move.
    2. B of E is manipulating the interest rate to prevent all the idiots who paid to much from defaulting on their loans. That's the start of the adjustment.

  • rate this
    +2

    Comment number 15.

    1971 3-bed semi outer Croydon £6k - salary just under £1k
    1975 3-bed detached nearer Croydon £20k - salary just under £10k
    2006 4-bed detached nearby £400k - salary £40k
    Prices now too big a multiple of salary and market needs to correct this. Feelgood factor false - if my house has gone up so has the one I can no longer afford to buy! Now a ftb earning £40k can't buy a flat

  • rate this
    +3

    Comment number 14.

    Stamp duty is a horribly unjust regressive tax. Designed as the original mansion tax successive governments have been happy to reap the huge tax revenues generated by their inflation of house prices without considering any of the consequences.

    Perhaps one reason the housing market is so slow is because duty adds £7k to the cost of an average family house?

 

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