Stamp duty has been scrapped for first-time buyers purchasing properties worth up to £300,000, saving buyers up to £5000. Chancellor Philip Hammond made the announcement during the Budget today and said the changes take effect immediately.
Anyone buying a home worth up to £500,000 in the most expensive areas for the first time will also be spared paying stamp duty – known as the Stamp Duty Land Tax – on the first £300,000. This, said the Chancellor, would help young people and those trying to buy in the UK’s most expensive markets such as London.
Updated SDLT tax bands for 1st-time buyers
|£0 – £300000||0%|
|£300000 – £925000||5%|
|£925000 – £1500000||8%|
Example of stamp duty for 1st-time buyers
|Before Budget||November 22 Onwards|
|£208,000 – average 1st-time buyer property in the UK||£1,660||£0|
|£410,000 – average 1st-time buyer property in London||£10,500||£5,500|
|Above £500,000||Stamp duty is unchanged on purchases above £500,000|
Reform is effective immediately
Before the Budget, there had been numerous calls from across the property and financial sectors to reform stamp duty and help more young people get on the housing ladder.
The influential think-tank the Adam Smith Institute had said the levy was “gumming up the housing market” and branded it Britain’s “most damaging tax”.
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.
Reform of the duty was required, said its advocates, to encourage older buyers to sell up and increase supply in the market, while reducing the amount of land tax younger buyers have to pay.
All transactions completed from today onwards for first-time buyers under £300,000 will now be under the new stamp duty rules.
If you’re a first-time buyer, check out Homeward Legal’s comprehensive First-Time Buyers’ Hub where all your questions about purchasing for the very first time are covered in detail.