Stamp duty is to be suspended for a year on properties costing less than £175,000 as part of a package of Government measures to help the housing market.
The level at which the 1% purchase tax has to be paid is to be increased from £125,000, from tomorrow morning.
The move – which applies to residential property – would save someone buying a £174,000 property £1,740.
Stamp duty currently kicks in at properties costing £125,001. The move is expected to cost the Government £500m over the year.
Other new measures was a promise of ‘free’ loans for first-time buyers choosing unsold, newly built properties, worth up to 30% of the property’s value. After five years of paying no interest, the homebuyers would have to pay a fee.
Other measures include more shared equity schemes and enabling struggling owners to sell their homes and rent them back as tenants.
Communities Secretary Hazel Blears will announce a raft of proposals later today aimed at buoying the property market. She is one of several cabinet ministers putting forward plans seen as the beginning of Mr Brown’s “recovery plan”.
For existing homeowners who can no longer afford mortgage payments, the government says councils or social housing landlords can pay off the debt and instead charge tenants rent “at a level they can afford”.
Editor’s blog on the subject, click here