Hopes high stamp duty move will help city housing market

The Chancellor used his Budget speech yesterday to announce he would scrap stamp duty for those buying their first property up to a value of 250,000.

The move, which will apply during this year and next, will mean nine out of ten people buying their first home will not be liable for the tax. And it is hoped it will provide a major boost in Edinburgh, where 75 per cent of all sales last year were for homes costing less than 250,000.

David Marshall, a business analyst at Edinburgh Solicitors' Property Centre (ESPC), said it was unlikely the move would be a "magic bullet," but said it would still be welcomed by estate agents.

He added: "Certainly anything which helps first-time buyers is going to be of some benefit to the market in general.

The Chancellor said the move would be funded through the introduction of a new stamp duty band of 5 per cent on properties costing more than 1 million from April next year.

Stamp duty is currently charged at 1 per cent of the purchase price on properties costing between 125,000 and 250,000, although from midnight tonight first-time buyers will be exempt.

People buying a property for between 250,000 and 500,000 have to pay 3 per cent of the purchase price in stamp duty, while the tax is charged at 4 per cent on homes costing more than 500,000. The new 5 per cent band on homes costing more than 1m will come into force from April next year.

Scott Brown, a partner at Warners' estate agency, said: "I would have preferred to see more done to provide financial aid for first-time buyers. If the Chancellor had provided additional funding for those buyers who do not get help from the Bank of Mum and Dad it would have helped to stimulate the market further."

Elsewhere in the Budget, the Chancellor announced the end of some personal tax allowances on those earning more than 150,000 and a cut in tax relief on pensions for those with incomes above 130,000 a year.

He confirmed the Government would stick to a 2.2 per cent real terms rise on spending this year but warned cuts after 2011 would be the "toughest for decades".

MP CALLS FOR 4M TO REPAIR CAPITAL ROADS

THE Scottish Government is facing calls to allocate 4 million of funding for road and pavement repairs in the Capital after the money was set aside in the Budget.

Mark Lazarowicz, Labour MP for Edinburgh North and Leith, has demanded that the Scottish Government gives Edinburgh the 4m which should be the city's share.

He said: "I urge Edinburgh City Council to demand this money."