LONDON (Reuters) - Prime Minister Gordon Brown’s government cut an unpopular tax on home purchases on Tuesday and announced a 1 billion pound package aimed at boosting the slumping housing market.
Here are the details:
* Properties worth less than 175,000 pounds will be exempt from a home purchase tax known as stamp duty for one year from Sept 3, up from a 125,000 pound threshold now.
The move will cost the exchequer about 600 million pounds, spread over two fiscal years, the Treasury said.
The Department for Communities and Local Government also announced the following measures, worth about 1 billion pounds:
* A new mortgage rescue scheme to help 9,000 vulnerable families struggling with payments avoid losing their homes. Eligible home owners will have three options under the scheme:
-- a registered social landlord clears all secured debt and occupants will then pay a rent they can afford.
-- a registered social landlord buys a share in the home and converts the property to a shared ownership lease.
-- a registered social landlord provides an equity loan allowing mortgage payments to be reduced.
A government source said the scheme would cost about 300 million pounds ($540 million).
* A new shared equity scheme to help up to 10,000 first-time buyers earning less than 60,000 pounds buy new homes over the next two years. Buyers will be offered an equity loan of up to 30 percent of the house value, interest-free for five years, co-funded by the government and the housing developer.
A government source said this scheme would also cost about 300 million pounds.
* New social housing. The government will bring forward funding from existing budgets for affordable housing schemes, which could deliver 5,500 more homes over the next 18 months.
A government source said this measure would be worth 400 million pounds.