Budget: Miras/Stamp Duty
Saturday 13 March 1999
The cut is equivalent to a 0.35 per cent interest hike for a typical borrower. But some experts predicted it would go largely unnoticed at a time when interest rates have fallen several times, by up to 2 per cent, in the past six months.
Brokers argued this week that now the final tax breaks on mortgages are to be removed, it would strengthen the impetus for early repayment of home loans.
Meanwhile, some lenders have quietly welcomed the demise of Miras, already eroded to 10 per cent. They will now be freer to redesign the traditional 25-year loan, mixing other kinds of credit more flexibly with the homeloan package.
Less welcome is the increase in stamp duty, which will hit residents of housing hot spots throughout Britain, and will causing hardship to those living in London and the south-east of England.
From next Tuesday, homes above pounds 250,000 will incur 2.5 per cent in stamp duty, 0.5 per cent higher than at present. Similarly, the rate for those over pounds 500,000 rises to 3.5 per cent. If you have already exchanged contracts, the old rates will apply.
Property below pounds 60,000 will continue to be free of stamp fees on purchase. Up to pounds 250,000, the current 1 per cent will be levied.
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