Stamp duty rise buoys homebuyers

Homebuyers have received a boost from Gordon Brown today after he doubled the threshold for stamp duty.

14:38 16 March 2005

Homebuyers have received a boost from Gordon Brown today after he doubled the threshold for stamp duty.

The chancellor increased the threshold from 60,000 to 120,000 in his ninth Budget announcement, making it theoretically easier for first time buyers to get a foot on the property ladder, as thousands will now be exempt from property tax.

But some in the housing industry have expressed a desire for the level to rise even further, particularly as today's change will have only a limited effect in the south of England.

Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), said: "The chancellor should be praised for finally responding to the overwhelming pressure from the housing industry to update the archaic stamp duty system.

"However this is the increase we should have seen five years ago and we are still long overdue a real change to the thresholds."

Mr King claimed that the change to stamp duty will help 300,000 homebuyers, but that it is only a "first step in the right direction" and will prove "irrelevant" to those wanting to buy property in London and the south-east.

"With average house prices across the UK now 150 per cent higher than when the base level was last amended in 1993, a more significant increase in the minimum threshold to 150,000 was needed to make any real difference to the majority of homebuyers," he added.

Only one in 25 properties sold in London last year would have been exempt at the new level, whereas two thirds of properties sold in 2004 in the north-east cost less than 120,000.

Today's rise represents the first increase in the stamp duty threshold since 1993.