First time buyers save £426m from stamp duty relief
However, overall stamp duty receipts went up from the second quarter (March to June) to the third quarter (July to September), suggesting wealthier home buyers are paying more. In the third quarter, the Government raise £3.2bn in stamp duty, 14% up on the second quarter, equivalent to £364m. This is partly attributable to a higher rate of transactions, which increased by 13% to 279,500 this quarter. However, they were still 8% lower than this time last year, showing pressures on the housing market remain.
Last month’s Budget saw the relief was extended to first time buyers buying through approved shared ownership schemes who choose to pay SDLT in stages, rather than on the full market value of the property. This has been retrospectively applied to eligible property transactions since last November.
Mel Stride MP, financial secretary to the Treasury, said: “Without this investment, more than 180,500 new homeowners may have struggled to get onto the property ladder. Maintaining the status quo was not an option.
“FTBR is a SDLT relief for eligible first time buyers. The tax relief can be used when buying a residential property where the purchase price is no more than £500,000 in England and Northern Ireland, as long as the purchaser does not own any other properties and intends to use it as their main residence. The relief was claimed in more than 58,800 transactions between July and September this year, an increase of 12% compared to the previous quarter.”
Laura Suter, personal finance analyst at investment platform AJ Bell, added:“The latest stamp duty figures show that 180,500 first-time buyers have used the Government’s stamp duty relief since it was introduced a year ago, saving a total of £426m in stamp duty. The average first-time buyer saved £2,360 in stamp duty, with almost 80% of first-time buyers in the past quarter paying no stamp duty, and a fifth of all property buyers claiming the relief.
“Undoubtedly this has provided a leg-up for some buyers, enabling them to save up to £5,000, and has meant that they can get on the property ladder sooner. First-time buyers can couple this tax break with the £1,000 a year Government bonus from the Lifetime ISA and other initiatives such as Help to Buy, in order to boost their chances of getting on the ladder.”