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Halifax to pay stamp duty for first-time buyers

Bank will pay up to £2,500 to cover the cost of tax on homes worth up to £250,000.

Halifax will pay stamp duty costs of up to £2,500.

Halifax will pay stamp duty costs of up to £2,500.

Halifax bank has announced it will cover stamp duty costs for first-time buyers purchasing properties worth between £125,000 and £250,000.

The bank put forward a similar offer a year ago following the end of a stamp duty ‘holiday’ for first-time buyers.

Stamp duty currently stands at 1% for homes up to £250,000, 3% up to £500,000, and 4% up to £1m – properties above the million mark are levied at between 5% and 7%.

First-time buyers to benefit

In 2009, stamp duty was suspended for people buying a home worth up to £250,000 and who had never previously bought UK property. The scheme ran out last spring, with Ed Balls, Shadow Chancellor, calling for it to be reinstated.

Halifax will offer the stamp duty by form of cashback to first-time buyers on its full mortgage range – it currently offers a rate of 3.24% with no fee on a two-year fixed rate for those with a deposit of 20% or more, and 3.79% rate for people with 15%.

However, a fee of 1% of the property price will be paid to solicitor on completion, with the offer starting today.

Stamp duty costs an ‘additional burden’

Craig McKinlay, mortgage director at Halifax, said: “Stamp duty can often be a cost that is overlooked, particularly for buyers who are focused on saving an initial deposit for a house.

“We’re keen to do what we can to support those buying their first home, and eliminate the additional burden of a stamp duty bill at what’s already an expensive time.”

Analysis conducted by Halifax shows that first-time buyers accounted for 40% of all property purchases in 2012, while Lloyds Banking Group are set to lend £6.5 billion to help around 60,000 first-time buyers in 2013.