In an interview with The Times this weekend, the new Chancellor of the Exchequer Sajid Javid suggested there could be changes to the way Stamp Duty works, primarily to benefit first time buyers and those moving up the property ladder.
How does Stamp Duty work?
Currently, all homebuyers pay Stamp Duty Land Tax when purchasing a freehold or leasehold residential property at a cost of £125,000 or more. However, first time buyers don’t pay any Stamp Duty on a property priced at £300,000 or less, and 5% on first time property purchases between £300,001 and £500,000. Full details are available here.
What are the proposed changes to Stamp Duty?
Many have taken the Chancellor’s interview in The Times to suggest that the way Stamp Duty works could change in this year’s Autumn Budget. The article hints at moving the Stamp Duty costs from the homebuyer to the seller. As a result, buying a house would be cheaper for first time buyers or those moving to larger homes, but it would be more costly for homeowners looking to downsize.
However, Javid has since announced via Twitter that these hinted changes would not be taking place, although he feels there are reforms to be made:
More speculation about stamp duty this morning. To be clear, I never said to @thetimes I was planning to put it on sellers, and I wouldn’t support that. I know from @mhclg that we need bold measures on housing – but this isn’t one of them. https://t.co/9OVk3XiqMd
— Sajid Javid (@sajidjavid) August 18, 2019
Is Stamp Duty likely to change in the future?
In the 2018 Autumn Budget, Stamp Duty relief for first time buyers was extended for shared ownership homes up to £500,000. So, although this year’s Budget date has not yet been confirmed, we expect housing reforms to be included. We will keep you informed of any updates.
Don’t forget, there are also other Government schemes in place to help first time buyers on the property ladder, including Help to Buy.