Autumn Budget 2017
Written by Rebecca Leeman, Chartered Legal Executive at Spire Solicitors LLP.
Stamp duty land tax is a tax paid by homebuyers when they buy property or land. Previously, first time buyers paid stamp duty on purchases above £125,000. Following the budget, the government announced stamp duty is abolished for all first-time buyers who are purchasing properties up to £300,000 and buyers will pay £5,000 less on purchases between £300,000 and £500,000.
A first-time buyer is someone who has never owned a freehold or leasehold property before and who is purchasing their only or main residence. When determining whether someone is a first-time buyer, residential property anywhere in the world is counted. Where there are joint purchasers, all purchasers would need to be first-time buyers otherwise the stamp duty tax will remain at the levels before the announcement.
The table below shows how much first-time buyers will pay from the 22nd November 2017 onwards:
|Property price||Before the Autumn Budget 2017||22nd November 2017 onwards|
|Above £500,000||Stamp duty is unchanged on purchases above £500,000||Stamp duty is unchanged on purchases above £500,000|
As first time buyers are often more cash constrained than other buyers, it is hoped this will contribute to resolving the housing crisis and will help over a million first time buyers get onto the housing ladder. Depending on the location within the UK, it is predicted the average first time buyer will pay no stamp duty and the stamp duty bill of the average first time buyer in London will nearly halve.
On Wednesday 22nd November 2017, the government also announced they would provide a £44bn capital investment to boost the housing market. By the mid-2020s there should be 300,000 homes being built every year which is the highest level since the 1970s. The hope is this will make houses more affordable but due to the current demand, it is unlikely prices will be significantly affected. Local councils will also be able to charge council tax on empty properties in an attempt to discourage empty homes.