Are changes to Stamp Duty afoot?
Yorkshire Building Society have made a statement ahead of the spring budget calling for Stamp Duty to become a tax on sellers, not buyers. This is in an attempt to improve the situation for struggling first time buyers. The threshold on stamp duty was increased to £125,000 in 2006 to keep up with house price inflation and now nearly 75% of first time buyers pay stamp duty compared to just over 50% in 2006.
A representative at YBS has suggested that first time buyers in the UK could save an average of £3,625 on their up-front property purchase costs by making the switch, and buyers in London could save a massive £13,171. The savings aren’t just for first time buyers though and anyone moving up the property ladder could save £4,154 on average.
Chancellor Phillip Hammond is due to make his Spring budget announcement on Wednesday and with the government currently raising a record amount of tax from property sales is there a chance they would change the way Stamp Duty works?
Andrew McPhillips the chief economist from YBS says “Levying the charge against sellers rather than buyers will help to reduce costs for first-time buyers, helping more people to get on the property ladder. It would also help those moving up the property ladder, enabling them to move to a more suitable property and potentially freeing up smaller homes for first-time buyers to purchase.”
Some have reacted to the statement by saying that if the seller faces the additional burden of paying stamp duty that this cost would be added on to the property asking price and would have little effect on affordability overall.
If you’re considering buying your first home or looking to move home and have questions around affordability please call us on 01273 736536. Read our article on mortgage affordability myths.
Source: BBC News