Both homebuyers and the property industry are hoping for changes in the Chancellor’s Autumn Statement on 23 November.
Much of the media has anticipated a reduction in Stamp Duty Land Tax (SDLT) and the online estate agent, EasyProperty, has called for the tax threshold to be raised to £250,000 to open up the market for more first time buyers. One of the recommendations in the Home Owners Alliance’s long standing campaign for SDLT reform is for the threshold to rise with house prices and for first time buyers not to pay the tax at all.
Who pays SDLT?
Homebuyers have to pay SDLT if the property they are buying costs more than £125,000. The tax rate then rises with the purchase price:
- 2% from £125,000 to £250,000
- 5% between £250,000 and £925,000
- 10% between £925,000 and £1.5 million
- 12% over £1.5 million
Existing property owners buying an additional property pay an extra 3% and there have also been calls for this tax, introduced in April this year, to be removed.
Harvey Harding, head of private clients at PM Law, says, “Raising the SDLT threshold would certainly make it easier for first time buyers in particular. The average house price in the UK stands at roughly £217,000 which means the purchaser has to pay £1,835 SDLT. With so many people really struggling to build up their deposit, saving nearly a couple of thousand extra just adds to the difficulties they face. A reduction in the rate or increase to the threshold would make a big difference. And of course, if first time buyers were exempt from paying the tax at all that would help to bring home ownership within the reach of many more.”