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3 September 2008 Stamp duty scrapped for properties under £175,000

Stamp duty has been suspended on properties costing less than £175,000 in a bid to kick-start the UK’s ailing housing market.

Earlier this week the Chancellor announced that the unpopular tax will be axed for one year for transactions made from Wednesday 3 September.

Alistair Darling had been accused of ‘dithering’ over possible plans to reform stamp duty which, according to experts, has contributed to the recent stall in new property purchases.

By raising the stamp duty threshold from £125,000 the Government estimates that half of all property transactions will now be from the tax.

Other housing measures unveiled include the introduction of interest-free loans of up to 30% on new properties for families with incomes less than £60,000 per year.

However, the Tories have described the latest package of reforms as a ‘short-term survival plan’ for Prime Minister Gordon Brown.

According to new figures, the average price of a UK home has fallen by more than 10% in the last year, while new mortgage approvals dropped to just 33,000 in July – down by 71% on 2007.