Everything You Need To Know About The New Stamp Duty Measures
In his latest budget, Chancellor Phillip Hammond announced an immediate scrapping of Stamp Duty for first time buyers who are purchasing a property up to the value of £300,000…
For first time buyers purchasing up to a value of £500,000, they’ll nothing on the first £300,000 and then just 5% on anything between the two.
The move is designed to bolster the property market, encourage developers to build more new homes to fall in line with the Government’s target of 300,000 by the next decade and make it easier for first time buyers to get on to the property ladder.
Exactly what effect it has will be anyone’s guess, the full impact of which won’t be seen for a number of years.
The Office for Budget Responsibility estimated that it would only increase the number of first-time purchases by an additional 3,500 but the Chancellor insisted “This is our plan to deliver on the pledge we have made to the next generation that the dream of home ownership will again become a reality in this country.”
What it does mean is that purchasing a property is now cheaper for 95% of all first time buyers and abolishes stamp duty altogether for 80%.
There were mixed views from industry experts but Jeremy Duncombe, Director of the Legal & General Mortgage Club said, “For too long, Stamp Duty has stood as just another barrier to homeownership, another cost to overcome, but with this exemption the path to owning a home has just been made a bit easier.”
Before the announcement, Stamp Duty was paid on all properties priced over £125,000 and the total amount paid was dependent on a number of pricing thresholds and your buying circumstances, which is still the case for all other types of buyer.
A first-time buyer making a purchase of £200,000 would have been expected to pay £1,500 in Stamp Duty which will now be a grand total of £0.
The saving is expected to cost the treasury £3.2bn over the next five years but it will likely be welcomed by anyone who is able to take advantage of the new measures. Especially after having saved up for a deposit, pay Solicitors, pay survey fees etc. in what can often be an expensive process.
To qualify for the Stamp Duty exemption, all buying parties must be deemed as genuine “first-time buyers” which means never having owned a property before.
If you are a first-time buyer purchasing with your partner – who is not, or if you have inherited a property previously, you will not qualify for the saving.
To find out how much stamp duty you’ll be expected to pay, click here for a useful stamp duty calculator.
If you have any questions about Stamp Duty, or any other aspect of buying and selling property, please feel free to send an email to firstname.lastname@example.org and we’ll be happy to help.
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