Abolition of Stamp Duty for First Time Buyers

Philip Hammond announced that first time buyers would be exempt from Stamp Duty in his Budget today.

In his much anticipated Budget today, the Chancellor Philip Hammond has announced that there will be an abolition of Stamp Duty for First Time Buyers (FTBs) up to the purchase price value of £300,000.

This announcement had been anticipated by the property community and had been encouraged to help the FTBs who were finding it harder and harder to purchase their own homes.

In addition, any First Time Buyers who are buying in higher cost areas will get relief on the first £300,000 of a purchase price of up to £500,000.

The finer details of the new rules will need to be checked, including whether both parties in a joint purchase need to be FTBS (which we believe is likely to be the case) and we will update here with any further information that we have.

The changes come into effect from today, so anyone who completes on a property from today onwards, and who has not owned a property before, will likely benefit from this change.

For a purchase price of £300,000 this would save £5,000 that would otherwise need to be found on purchasing the property. The problem with Stamp Duty is that it needs to be paid in cash so it is money that needs to be saved in addition to a deposit and any other costs that are required when moving. Lifting this charge may mean that FTBs are able to purchase their property sooner without having to save this additional amount.

For those who buy a property in a high cost area worth £500,000 and who are eligible for the £300,000 relief, they will still need to pay £10,000 in Stamp Duty but will not need to pay the first £5,000. (Clarification may be needed on how the exemption works in this situation).

According to the Chancellor this change is

A stamp duty cut for 95% of all first-time buyers who pay stamp duty.

And no stamp duty at all for 80% of first time buyers from today.

This is good news for First Time Buyers and we will wait to see what kind of effect this has on the housing market.