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Spend & Save

Home-buyers must hurry to catch stamp-duty holiday

The end of the stamp-duty holiday is nigh and mortgage lender Abbey is urging home-buyers to complete their sales in time to avoid a sizeable tax bill.

The Government's waiver of stamp duty on properties valued between £125,000 and £175,000 has been in place since September last year, but this is to end on 31 December. With mortgage applications typically taking at least three months, Abbey says that the deadline is, in effect, 30 September for those looking to purchase and avoid the 1 per cent tax on properties of that value.

Abbey predicts that 35,000 people will look to purchase a property of the relevant value by 31 December, which would normally cost them a stamp-duty bill of between £1,250 and £1,750. Home buyers in the South-east are most at risk, with 9,369 expected to buy such properties.

"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," says Nici Audhlam-Gardiner of Abbey Mortgages.

The conclusion of the stamp-duty holiday could mark the beginning of a difficult winter. After fuel duty rose last week by 2p a litre, Britons are also bracing themselves for the return of VAT to 17.5 per cent in January 2010.