Reminder re Stamp Duty Changes

On the 22nd November 2017, the Chancellor announced exciting new changes to Stamp Duty Land Tax (SDLT) for First Time Buyers as part of the Autumn 2017 budget.

SDLT is a tax that anyone purchasing a property or land costing more than a set amount (currently £125,000 for Residential Properties) has to pay. This sum is calculated based upon the value of the property and whether you own multiple properties.

The changes, which came into effect immediately, mean that you are no longer liable to pay SDLT on the first £300,000 of any house purchase if you (and anybody that you are purchasing a property with):

• Are a First Time Buyer;
• Have never inherited a property;
• Are not the beneficiary of a Trust that owns a Property; and
• Are purchasing the property as your main or only dwelling.

Additionally, if you fulfil this criteria and you are purchasing a house up to the value of £500, 000, you would only be liable to pay SDLT at a rate of 5% on the portion of the purchase price from £300,000.01 to £500,000.

When publishing the changes to SDLT, the Chancellor was clear that this relief was to assist First Time Buyers to get on the ‘housing ladder’ whilst the governments ‘wider housing reforms take effect.’  It was also felt that this relief would help over a million first time buyers get onto the housing ladder over the next five years.

However, the Office for Budget Responsibility has since raised concerns that the SDLT relief could actually result in higher house prices.  This will no doubt be concerning to many First Time Buyers, many of whom have reported raising a deposit for a house purchase to be one of the biggest hurdles they face when trying to get onto the housing ladder.

Robert Gardner, Chief Economist at Nationwide has also commented that he believes that the relief will have a ‘modest impact’ upon the housing market given that ‘in many regions, first time buyers already paid little or no stamp duty as the price of the typical first-time buyer property was below the previous threshold of £125,000.’

We are now over one month on from the changes and whilst the Prime Minister has recently said that the SDLT relief for First Time Buyers has had an ‘immediate impact’ upon the market, in practice it is still far too early to determine whether the changes will actually assist First Time Buyers getting their initial step upon the property ladder.

If you would like to talk about the changes to Stamp Duty and whether you are eligible for the relief then please do not hesitate to contact our Conveyancing Team on 02477 710100.