There was good news today for first-time buyers when Chancellor Philip Hammond abolished Stamp Duty for those buying properties worth up to £300,000, a potential saving of up to £5,000.
The Chancellor made the announcement during the Budget presentation in the House of Commons and said the changes come into effect immediately, meaning all transactions completed from today onwards for first-time buyers will be free of stamp duty when the purchase price is £300,000 or less.
Those buying in London and in other expensive areas across England for the first time will also save money. Mr Hammond said the first £300,000 on any property transaction worth up to £500,000 for a first-time buyer will also now be exempt from the Stamp Duty Land Tax. The aim is to help younger people and those trying to buy in London get on the housing ladder.
Updated SDLT tax bands for 1st-time buyers
£0 – £300000
£300000 – £925000
£925000 – £1500000
Example of stamp duty for 1st-time buyers
November 22 Onwards
£208,000 – average 1st-time buyer property in the UK
£410,000 – average 1st-time buyer property in London
Stamp duty is unchanged on purchases above £500,000
Duty levied on a sliding scale
In the run-up to the Budget, there had been numerous calls from property and financial professionals to reform Stamp Duty, with the tax described as a barrier to social mobility. Advocates of reform said changing the duty would encourage older buyers to sell up and increase supply in the market.
Stamp Duty Land Tax is paid on all residential property worth £125,000 or more and on commercial properties sold at more than £150,000. It is levied on a sliding scale and raises around £11 billion a year for the Treasury.
Mr Hammond also addressed other aspects of the housing market. He set a target of 300,000 new homes being built in England annually by the mid-2020s, pledging an extra £44 billion over the next five years to encourage more small building firms to return to the home-building market and to boost construction skills.
Urban areas focus of development
Urban areas will be the focus of high-quality, high-density homes, according to Mr Hammond, as these are the places where people most want to live and where most jobs are created.
Greenbelt protection will remain in place, but the planning system is to be reformed with a review into why delays in housing developments occur to report by next spring.
One issue in cities such as London are the number of empty properties. To discourage owners from buying and leaving homes vacant, councils will now be allowed to levy the full council tax on empty properties in their area.