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Budget 2017:  Stamp Duty Changes

The stand out feature of the Budget for first-time buyers living in England, Northern Ireland and, for a time, in Wales is an immediate abolition of stamp duty when buying properties of up to £300,000. For properties costing up to £500,000, no stamp duty will be paid on the first £300,000.

The starting point for paying stamp duty in England was £125,000.

The average first-time buyer in the UK had paid about £1,660 in stamp duty, on a property costing £208,000.

However, in many parts of the country first-time buyers pay relatively little in stamp duty. The effect will be felt the most in the South East of England where the average home bought by a first-time buyer costs £276,773. In London, it is £409,795.

The Office For Budget Responsibility also pointed out that a subsequent rise in house prices could cancel out the benefit from the stamp duty measures, and it will primarily assist existing homeowners.

It does not effect the biggest up-front cost for first-time buyers - the deposit. In the UK, the average deposit is £37,101, according to the Halifax.

It also will do nothing for potential downsizers who are put off by the stamp duty cost.

Housing is a devolved issue, so there are different rules in the different nations.

In Scotland, the equivalent tax is called Land and Buildings Transaction Tax. Here the tax is levied on buyers purchasing homes costing more than £145,000 - the same as the average house price for all buyers.

New rates have already been set in Wales for next April, with a starting point tax of 2.5% on properties of more than £150,000. The average home in Wales cost £153,000 in September, official figures show. The changes announced in the Budget will take effect until then.

Scotland and Wales will need to decide whether they follow this measure in England.

Northern Ireland, which has the same stamp duty rates as England, has an average house price of £132,000.

Mr Hammond announced measures that he said would see 300,000 new homes built a year by the mid-2020s. He had signalled this change earlier in the week.

Local authorities will be able to increase the council tax premium on empty homes from 50% to 100% "to encourage owners of empty homes to bring their properties back into use".

Source:  BBC.co.uk

Sam: 22nd Nov 2017 15:28:00

 

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