Print friendly version 10 Oct 2007

Darling brings little joy to first-time buyers

Kate O’Raghallaigh

Yesterday’s Pre-Budget Report brought little in the way of relief for first-time buyers.

While Chancellor Alistair Darling has been accused of stealing Tory tax proposals with his decision to reform Inheritance Tax policies and non-domicile status, he chose to maintain the Stamp Duty thresholds at their current levels.

In yesterday's report, Darling announced that he is raising the Inheritance Tax threshold for married couples to £600,000, meaning that when one spouse dies, the surviving spouse can combine their tax-free allowances of £300,000 each, and bequeath £600,000 worth of assets, tax free.

The changes will also apply to those in civil partnerships.

Single property owners, as well as unmarried couples however, remain unaffected by the new changes and will still be liable to be charged 40% if their assets are worth more than £300,000 when they die.

Last week, the Tories proposed to raise the Stamp Duty threshold to £250,000, meaning that nine out of 10 first-time buyers would be able to avoid paying tax on their first home.

Commenting on the Chancellor's lack of reform to Stamp Duty, Clare Hartnell, head of property and construction at Grant Thornton Financial Advisers, said: "The lack of announcement on Stamp Duty is particularly surprising, given the Conservative's proposals last week.

"One would have thought that the Chancellor would rise to the challenge and offer a carrot to potential property investors, however he may feel it to early to be fiddling with Stamp Duty when the housing market is cooling off."

 

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