An estimated 69,000 first-time buyers have benefited from the abolition of stamp duty land tax on properties under £300,000
According to the Government’s latest figures, in the period to 31 March this year, 69,000 first-time buyers have benefited from the abolition of stamp duty land tax (SDLT) on properties under £300,000, since it was first applied on 22 November 2017.
First time buyers relief (FTBR) applies to purchases of dwellings for £500,000 or less, provided the purchaser has never owned a property and intends to occupy the property as their only or main residence. Under the relief, such purchasers are not liable to SDLT on transactions valued at £300,000 or less. On transactions valued at more than £300,000 but less than £500,000, they are liable to pay 5% SDLT on the portion over £300,000.
FTBR applies to purchases in England and Northern Ireland. In Wales, it applied until Land Transactions Tax (LTT) replaced SDLT for transactions in Wales from 1 April 2018.
19% of all residential transactions to 31 March this year included a claim for FTBR. The total amount of SDLT relieved is estimated to be £159 million; half of which (49%) was, perhaps not surprisingly, seen in London and the South East.
19% of all FTBR transactions were in the South East; 13% were in London. The average amount relieved was £2,300: London had the highest average of £4,300; Northern Ireland had the lowest average at £800.
The Government estimates that FTBR will help over 1 million people to get onto the housing ladder over the next five years.
Despite the Government’s optimism, the Resolution Foundation’s report ‘Home improvements – Action to address the housing challenges faced by young people’ calls for a further reduction in stamp duty. The Foundation argues that “the main way to change the relative bargaining power of first time buyers would be to cut stamp duty across the board, while maintaining the surcharge for UK-based buyers of second and additional homes at current levels.” Please see our 30 April 2018 bulletin ‘First home purchase no easier’.