Phillip Hammond announced the immediate end of stamp duty for all properties up to £300,000 bought by first-time buyers as part of a range of measures designed to address the UK’s housing crisis. The move will save four out of five first-time buyers up to £5,000.
First time buyers spending up to £500,000 – including most buyers in Welling and Dartford – will also benefit, as the first £300,000 of the purchase price will not be subject to the tax. Previously the tax was paid on all purchases over £125,000.
First-time buyers will pay 5% on any part of their purchase between £300,000 and £500,000 – this means anyone spending £500,000 on a home will pay £10,000 in duty, £5,000 less than under the previous rules.
The new rules will affect first-time buyers in England, Wales and Northern Ireland – that complete on their purchase before April 2018. Our Research department suggests that in Bexley and Dartford 34.5% of homes on the market could now be bought tax-free, compared with 14.3% before the change.
Eamonn Delaney of Anthony James has added that "the stamp duty change will help first time buyers by accelerating their ability to purchase. The saving could mean they now have or will shortly have enough deposit".
It also good news for sellers, the Office for Budget Responsibility (OBR) said the tax break was likely to push property prices up by about 0.3%, with most of the increase coming in 2018.
“The main gainers from the policy,” said the forecasting group, “are people who already own property.
In summary first time buyers will need to act quickly to get the full benefit of the measures before house price inflation negates the effects.