01 Dec 2017
In a new report, building society Nationwide has stated that the Autumn Budget changes to Stamp Duty Land Tax (SDLT) for first-time homebuyers will have only a ‘modest impact’ on housing demand.
Chancellor Philip Hammond abolished SDLT for first-time homebuyers in England, Northern Ireland and, temporarily, for those in Wales, from 22 November. The abolition applies for individuals seeking to purchase a first home worth up to £300,000. Wales will receive devolved stamp duty powers in April 2018, when its Land Transaction Tax (LTT) comes into effect.
To assist those in London and other expensive regions, the first £300,000 of the price of a home valued at £500,000 will be exempt from SDLT for first-time homebuyers.
Different rules apply in Scotland, where the Land and Buildings Transaction Tax (LBTT) is applicable.
Commenting on the report, Robert Gardner, Chief Economist at Nationwide, said: ‘The decision in the Budget to abolish stamp duty for first-time buyers purchasing a property up to £300,000 (with relief for those purchasing a property up to £500,000) is likely to have only a modest impact on overall demand.
‘In many regions, first-time buyers already paid little or no stamp duty as the price of the typical first-time buyer property was below the previous threshold of £125,000.’
Meanwhile, the Office for Budget Responsibility (OBR) warned that the abolition of SDLT for first-time buyers could result in higher house prices, as prospective buyers will have more money to put towards a deposit.