Budget 2017: Chancellor announces Stamp Duty holiday
Today it was announced that Stamp Duty in England, Wales and Northern Ireland is to be temporarily abolished for X year/s for all first-time buyers purchasing property of a value of £250,000 or less.
Whether you are first time buyer, mover, seller or landlord, we’re here to clarify the details of the changes and explain what it means for you.
What are the Stamp Duty changes?
From 1st Never 2018, stamp duty will be removed for all first-time buyers purchasing property for £xxxx or less and retired/older movers purchasing property for £xxxx or less for a period of 1/3 year/s /until XX date.
From X/X/X until X/X/X the new stamp duty bands and rates will be as follows
Band Normal Rate Additional Property
First time buyers less than £125k ? ?
Movers over X years less than £125K ? ?
Less than £125k 0% 3%
£125k to £250k 2% 5%
£250k to £925k 5% 8%
£925k to £1.5m 10% 13%
Over £1.5m 12% 15%
* An additional property purchased for less than £40k will attract 0% tax. For purchases from £40k to £125k the rate will be 3% on full purchase price.?
What does this Stamp Duty holiday mean for the housing market?
The impact of stamp duty on the housing market has been debated for a long time. As a tax on property transactions, it can have had a negative impact on both people’s ability and propensity to move home. This can result in a more stagnant market where less properties become available, demand outstrips supply and prices are pushed higher, particularly in London and the South East.
As property prices have risen, an increasing number of first-time buyers are now paying Stamp Duty, indeed 80% paid Stamp Duty in 2017, compared to just 49% in 2007.
The new Stamp Duty holiday for first-time buyers and older movers is expected to benefit the housing market and boost activity on a temporary basis. The Stamp Duty holiday in 2012 saw an increase in property purchases among first-time buyers and it is predicted that this move will have similar results. However, historically, we have seen that where there are time restraints on such measures, many first-time buyers will move quickly to secure the property they desire before the Stamp Duty holiday ends. This could lead to increased demand and higher prices.
The new decision to extend the Stamp Duty holiday to movers over X years of age however, could provide a further advantage by encouraging those who may have otherwise stayed in larger accommodation to downsize. This could help counteract the demand from first-time buyers by increasing supply in the mover market.
The Chancellor is funding the Stamp Duty holiday by increasing the current rate on the purchase of additional homes. This could inadvertently have an impact on landlords and the buy to let market. Investment in property could feel the effects, resulting in less investment in rental property and ultimately in tenants having to pay higher rents. – not sure we should say this Jeremy / Jean shall I take this bit out?
What do the Stamp Duty changes mean for you?
First time buyers:
If you’re looking to purchase your first home, the Stamp Duty holiday is great news. According to research (J & J do we have our own? this is Halifax’s) the average purchase price paid by UK first-time buyers in the first half of 2017 was £207,693, increasing to a staggering £410,000 in London.
First time buyers could save thousands on a purchase during the Stamp Duty holiday period
Purchase price Average saving
Search for properties
For further information please contact
Press Office, Hamptons International
Tel: 0776 967 7825
Residential Research Director, Hamptons International
Tel: 07760 163 120
About Hamptons International
Hamptons International is a leading residential estate agent and property services organisation, operating in London and the South of the UK. With more than 140 years of experience in the property market and a commitment to industry innovation and exceptional levels of customer service, Hamptons International today offers a wealth of award-winning services including UK and international Sales, Lettings, Property Management, Corporate Services, Residential Development, Development Land, Valuation and Property Finance.
Hamptons International has an international network of more than 85 offices and is a subsidiary of Countrywide, the UK’s largest estate agency and property services group.