On 22nd November it was announced that Stamp Duty is to be abolished for for all first-time buyers purchasing property of a value of £300,000 or less.
If you are a first-time buyer, we’re here to clarify the details of the changes and explain what it means for you.
What are the Stamp Duty changes?
From immediate effect, stamp duty will be removed for all first-time buyers purchasing property for £300,000 or less. What's more for first-time buyers purchasing property priced up to £500,000 they will only pay stamp duty on the difference.
From 22nd November 2017 the new stamp duty bands and rates will be as follows:
|First-time buyers less than £300k||0%|
|First-time buyers less than £500k||5% on proportion above £300,000|
|First-time buyers more than £500k||follow existing rates|
What does the Stamp Duty change mean for the housing market?
The chancellor made a bold move to reduce stamp duty for all first-time buyers. Raising the threshold for SDLT to £300k for all first-time buyers forever will lift 80% of first time buyers out of the tax. To account for higher prices in some parts of the country, all first-time buyers buying property up to £500k will benefit from the £300k exemption. That means that 95% of first time buyers will benefit from the change.
As property prices have risen, an increasing number of first-time buyers are now paying Stamp Duty, indeed 80% paid Stamp Duty in 2017, compared to just 49% in 2007. This news will remove one of the hurdles facing first-time buyers and more movement in this end of the market is expected as a result.
What do the Stamp Duty changes mean for you?
If you are a first-time buyer the chart below shows how much first-time buyers in different areas of the country could benefit.
Impact on stamp duty for first-time buyers by location:
|East Midlands||East||Greater London||North||North West||South|
|South East||South West||West||West Midlands||Yorkshire & Humber||England overall|