Stamp duty tax break

STAMP duty in Britain‘s poorest areas will be abolished on properties worth up to £150,000, the Chancellor said in his pre-Budget speech.

The plans were first outlined in last November‘s pre-Budget, but the scheme was put back after a study was unable to establish which the ?deprived‘ areas should benefit. The Treasury has now earmarked 2,000 wards – areas within boroughs – that will see stamp duty abolished on homes and businesses from Friday.

Ray Boulger of mortgage broker Charcol welcomed the move. He said: ?After the announcement potential buyers were putting off the decision, hoping stamp duty would soon be abolished – it was making the situation worse in those areas.‘

Mr Brown originally said the exemption would take effect 'from April 2001'.

At present, house-buyers pay 1% of the property's bought for more than £60,000, 3% for homes above £250,000 and 4% for those above £500,000. The tax applies to the entire price, so if a house sells for £70,000, the stamp duty is £700, ie 1% of the price, not £100, which is 1% of the amount over £60,000.

Not everyone is impressed by the Chancellor's latest move. Rachel Ramsden of financial services group Britannic Money said: 'We are disappointed it is for deprived areas only. The zero threshold for stamp duty has not increased since March 1993.

'Had it been indexed to rise in line with house prices, it would now be £108,000 (instead of £60,000). It is the first time buyers who already have a difficult task in climbing up

the property ladder, who will be penalised by this decision.'

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