Stamp duty threshold raised!

2nd September the Chancellor announced  that no Stamp Duty is to be charged on house purchases worth £175,000 or less for the next year.

Mr Darling raised threshold at which the 1 per cent purchase tax becomes chargeable, from £125,000 to £175,000, as from 3 September.

Stamp Duty now applies at 1 per cent to properties worth between £175,001 and £250,000, while the rate for properties between £250,001 and £500,000 stays at 3 per cent, and for those costing over £500,000, it is still 4 per cent.

The Treasury said the relief on homes worth less than £175,000 will apply to transactions with an effective date on or after 3rd September 2008 and before 3rd September 2009. The measure has been welcomed by mortgage lenders.

Tax on buying property
If you buy a property in the UK over a certain purchase price you have to pay Stamp Duty Land Tax (SDLT). This is charged on all purchases of houses, flats and other land and buildings.

What is stamp duty land tax?
SDLT replaced Stamp Duty in December 2003 and is a tax on the purchase price of land and buildings. When you buy a property you may have to pay SDLT.

Paying SDLT
New thresholds introduced from 3 September 2008 mean that if you buy property where the purchase price is £175,000 or less you don't pay any Stamp Duty Land Tax at all.

If it's more than £175,000, you pay between one and four per cent of the whole purchase price. The previous starting rate threshold for SDLT was £125,000.

You can check current rates of SDLT on the HM Revenue & Customs (HMRC) website.

SDLT disadvantaged areas relief
Disadvantaged Area Relief (whereby properties bought in areas designated by the government as 'disadvantaged' had a higher SDLT threshold than other properties) will not apply for property purchases between 3 September 2008 and 2 September 2009 inclusive.

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