The government's holiday on stamp duty land tax will come to an end on Saturday 24 March 2012. After that first time buyers will face a tax of 1% on house purchases between £125,000 and £250,000, and a 3% tax on purchases over £250,000.
‘With only two months remaining, first time buyers must act quickly to avoid paying stamp duty on their first home purchase. If you're currently in a chain and waiting to complete your purchase then make sure that others in the chain know about the end of the tax holiday too. Good communication with your solicitor can help move the process forward, helping you beat the cut date,’ said Wendy Evans Scott, president of the National Association of Estate Agents.
The NAEA's recent figures show that the number of sales to first time buyers edged up during November and December from 19% to 21% of sales per branch.
However first time buyers still represent a low percentage of overall property sales, and NAEA data shows the number of first time buyers getting on to the housing ladder hit a three year low in October 2011, at just 16% of sales.
‘First time buyers are key to a healthy property market. We hope to see the number of people completing the purchase of their first home continuing to increase through February and March, as many first time buyers are keen to purchase their first home before the tax exemption deadline,’ said Evans Scott.
‘However, it is impossible to predict what impact the end of the tax exemption will have on first time buyers, particularly those on very tight budgets of under £250,000 for whom the 1% tax could be disastrous. The government will need to monitor sales closely and consider other action to support the fragile first time buyer market,’ she added.
