Today Abbey issued a warning to all would-be buyers to ensure they complete their sale before 31 December. With house purchases typically taking at least three months this means the effective deadline for mortgage applications is actually 30 September.
As part of the Government's economic stimulus package, properties valued between £125,000 and £175,000 have been exempt from stamp duty since September 2008. This will come to a close at the end of the year meaning home buyers will once again face a 1% tax on all properties valued between £125,000 and £175,000.
Based on the previous two quarters' sales data, almost 35,000 people will look to buy a house valued at between £125,000 and £175,000 between 30 September and 31 December 2009. Buyers at this property price range would normally face a stamp duty tax bill of anywhere between £1,250 and £1,750. If these people were to miss the stamp duty deadline they would face an estimated collective tax bill of around £53.7 million.
The high volume of buyers in South East and South West means that these are the areas with largest number of buyers at risk, a predicted 9,369 and 5,265 respectively. In each of England and Wales' other regions, between one and three thousand people could potentially be affected.
Nici Audhlam-Gardiner, director of Abbey Mortgages, commented: "The stamp duty holiday has been a great support in stimulating the housing market, and has significantly reduced costs of house purchase for houses up to £175000 in value. However, with the holiday coming to an end, anyone looking to buy a property worth more than £125,000 faces a sizeable tax bill if they fail to complete before 31 December.
"With a saving of up to £1,750 at stake for those people who have been considering buying a property, this impending deadline is an added incentive to move fast. First time buyers have been hit hard by the costs of climbing on to the ladder and for these people this is a golden opportunity to make a big saving.”
