In today’s budget, the Chancellor of the Exchequer Philip Hammond announced that, with immediate effect, Stamp Duty Land Tax has been abolished for First Time Buyers buying properties in England Wales and Northern Ireland that will be their main residence and costing up to £300,000.
This represents a potential maximum saving of £5000 (based on a purchase price at the top end of the scale at £299,999) and an average saving of approximately £2000, based on the average property value in the UK (£226,367.00 according to the UK House Price Index figures in September 2017).
In addition, first time buyers paying up to £500,000 will benefit from a Nil rate band on the first £300,000 of the purchase price; a saving of £5000. This is intended to help First Time Buyers in areas where properties are more expensive, typically such as London and the South East of England. (There are no changes to the existing position if the purchase price is over £500,000.)
HM Treasury estimates that these changes mean that 80% of FTB’s will pay no tax on their property purchase.
This cut to the Stamp Duty rate is combined with a range of measures designed to keep the housing market moving and to allow young people to continue to be able to access the Property Ladder, with a promise of £44 Billion being committed to helping the market over the next five years, a threat of compulsory purchasing of land held by developers if they do not build on it, a commitment to an increase in the rate of new house-building, and the increasing use of the Help to Buy ISA which gives a tax free bonus of 25% of the amount saved, to be used towards the purchase of your first property. In addition, a further £10BN has been pledged to continue to fund and support the provision of Help-to-Buy equity loans.
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