Residential property purchases of less than £175,000 will be exempt from stamp duty for the next 12 months.
A Treasury statement said: “The Chancellor of the Exchequer has today announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.
“This will provide an exemption from stamp duty land tax for land transactions consisting entirely of residential property where the chargeable consideration is not more than £175,000.
“This relief will apply to transactions with an effective date on or after 3rd September and before 3rd September 2009.”
At present, buyers of properties that cost between £125,000 and £250,000 have to pay 1% of the purchase price in stamp duty to the Government .
Today’s announcement by the Treasury will take more homebuyers at the bottom end of the housing market out of the stamp duty bracket altogether, providing savings of upto £1,750.
Buyers of properties over £250,000 will still have to pay 3% in stamp duty, and homes above £500,000 4%.