The temporary raising of the stamp duty threshold has benefitted almost one in three homebuyers, it has been revealed.
Since September last year, a threshold of £175,000 has been in place, up from the usual level of £125,000, in an attempt by the Government to encourage people to move, and to shore up what was a floundering housing market.
According to Halifax, the move has meant around 112,000 homebuyers in England and Wales, or 31% of all buyers, have not had to pay the duty.
The increase has also seen more than a quarter (27%) of first time buyers escape the tax.
As a result, only 17% of first time purchases since last September have been above the temporarily higher threshold of £175,000. The proportion that would have paid stamp duty if the threshold had been £125,000 would have been 43%.
"The temporary raising of the lowest stamp duty tax threshold has removed a significant number of homebuyers from the tax net," said Martin Ellis, housing economist at Halifax. "This has been a boost to many people in a very difficult economic climate.
"The impact has added to the far more significant effect of the reduction in house prices in helping to reduce the costs of buying a home over the past year. Lower prices have also brought some properties below £175,000, therefore making the purchasers of such properties exempt from stamp duty whereas they would not have been a year ago."
The temporary increase is due to expire and the normal threshold of £125,000 set to return from the end of 2009.
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