Stamp Duty Changes: Good or Bad News for First-Time Buyers?
One of the most talked about announcements from Chancellor Philip Hammond’s Budget last month has been the abolition of stamp duty on homes up to £300,000 for first-time buyers.
Previously, stamp duty was payable on all purchases over £125,000. The latest change in legislation is designed to ease the difficulty of getting on the housing ladder for those in their twenties and thirties.
It is thought that under the new law, 80% of first-time buyers will pay no stamp duty, with a total of 95% paying less than they would have before. This is because the first £300,000 of any home costing up to £500,000 will be exempt from the tax for first-time buyers.
As a result, buyers will be able to save up to £5,000 when signing for a new home. Meanwhile, it’s expected that the Treasury will lose out on around £3.2 billion over the next five years, thanks to the move.
Announcing the changes, Hammond explained that was aiming to ‘take action today to help young people who are saving to own a home’ and struggling to come up with the ‘cash required up front’ (The Guardian).
Although this sounds like fantastic news for those looking to step on to the property ladder, the Office for Budget Responsibility (OBR) has stated that the real winners will be existing homeowners. This is because it is thought that the cut in stamp duty will lead to a rise in property prices of an extra 0.3% over the next year.
Another grey area has been the question of what will happen to those who have paid stamp duty in the couple of weeks since the Budget – those who have been caught in the crossover period. Thankfully, it has been announced that any first-time buyers in this situation will be eligible to apply for a refund on the stamp duty paid. This will come as a relief to many young people who have bagged their first homes just before Christmas.
There may also be some good news for tenants as the Government has promised that a consultation will take place regarding tenancy law and making it easier for landlords to offer longer term lets, thus increasing stability for those who rent.
It seems, then, that 2018 is likely to be a year of change for the property market – and we all hope, of course, that the market will continue to move forward and grow as we move towards the 2020s.
Are you keen to secure your first home before price increases hit? Then check out our property pages today for some inspiration!
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