Stamp duty cut for first-time buyers

The Autumn Budget 2017 was delivered by the Chancellor, Mr Hammond, on Wednesday 22nd November 2017. One of the key announcements was that stamp duty will be cut for first-time buyers, in an aim to make home ownership more affordable for young people in the UK.

First-time buyers of residential property outside of Scotland will pay no stamp duty land tax (SDLT) on the first £300,000 of the purchase price for a home, providing its value does not exceed £500,000.

The new relief from SDLT takes immediate effect from 22nd November 2017.

Ash Manning, Mortgage and Protection Adviser at Foster Denovo, says: “The new SDLT relief means first-time buyers, who are buying a property at £300,000 or less, could make a maximum saving of £5,000.”

Even for first-time buyers in London, the cut in first time stamp duty could still be good news, with the average house price for London at £471,742*.

Ash comments: “For first-time buyers in London, there is a benefit providing they keep below the £500,000 house value. In this case, the first £300,000 would be exempt from stamp duty and buyers would just pay the usual 5% on the remaining amount. However, if the house value goes above £500,000, then all exemption is lost.”

Ash summarises: “Although I have never known the £5,000 stamp duty to be a deal breaker for first-time buyers, it is still a great saving and I do believe that people selling properties around the £300,000 – £500,000 threshold will want to ensure their property is advertised at this value to attract first-time buyers.”

Your home may be repossessed if you do not keep up repayments on your mortgage.

*UK House Price Index (HPI) for March 2017: https://www.gov.uk/government/news/uk-house-price-index-hpi-for-march-2017