Stamp Duty Doubles For First-Time Buyers

first-time buyers – Stamp Duty Land Tax is payable in different amounts, depending on the purchase price of the property or land.

 

first-time buyers

first-time buyers –  It is an added expense, purchasers could do without.

Stamp duty for home buyers

Property Purchase Price                               Rate of Stamp Duty Land Tax

 

Up to £125,000                                                   0%

£125,001- £250,000                                           1%

£250,001- £500,000                                           3%

Above £500,000                                                 4%

 

First home buyer stamp duty

Stamp duty for first-time buyers has almost doubled to an average of £1,751 in just five years throughout theUK. The biggest rise has been inLondonand the south where house prices are highest. The average duty paid increased to £8,675 in the capital. One in five buyers in the south now pays the tax at the rate of three per cent of the price of their home, adding a minimum of £7,500 to the cost of each purchase. In 2007, the treasury made £6.4billion from stamp duty.

 

Between 2002 and 2007, the average amount of duty paid by first-time buyers went up 82 per cent, from data given by Halifax Bank. Nearly all first-time buyers inLondon, the South-East, the South-West andEast Anglianow pay the tax, which starts at the lower rate of one per cent on homes worth more than £125,000.

 

There is now clearly a national and regional divide, with some home buyers in the North of England, Yorkshire andHumberside,ScotlandandWalesalso, paying no duty at all. The Royal Institute of Chartered Surveyors said “By moving the threshold from £125,000 to £150,000, almost 17 per cent of all transactions would not pay stamp duty.” Last year more homes inEnglandandWaleswere pulled into the tax net by house inflation, and many within the industry are urging the Government to reset the marginal bands, to address the regional imbalances.

 

There are early signs of a slowdown in some parts of the Scottish property market, but prices still rose at an annual rate of 13 per cent in 2007, according to figures from the Bank of Scotland. The average Scottish house price was £144,897, although the average price in Inverurie,Edinburgh,Aberdeenand Helenburgh is more than £200,000. Capturing more home buyers in hthe stamp duty net.

 

Bank of Scotland press release (December 2007), estimated 300,000 first-time buyers entered the market across theUK, compared with 532,000 in 2002. This represents a reduction of 44 per cent. The average house price paid by a Scottish first-time buyer now stands at £123,000.

 

David Carmichael, area director, Savills Private Finance, a mortgage broker, said, “The number of first-time buyers who came into our offices has dropped from 40 per cent five years ago to 8 per cent today. The budget was a disappointment. The Chancellor has done nothing to help struggling homebuyers get a foot on the ladder.”

 

This tax is payable upon the completion of the purchase of your home. For Shared Ownership properties, stamp duty is not payable until you own 80 per cent of your home.

 

If you are buying a property in an area designated by the government ‘disadvantaged,’ you do not pay stamp duty land tax if the purchase price is £150,000 or less. You can locate these areas by visiting: www.hmrc.gov.uk to find out which areas inEngland,Wales,Scotland andNorthern Ireland is exempt from stamp duty.

 

In the 2007 budget, Gordon Brown, as chancellor, announced that carbon-neutral homes costing less than £500,000 would be made free of stamp duty until 2012. Properties valued above £500,000, a £9,000 stamp duty discount is applied. The chancellor’s decision (earlier this month) to again freeze the thresholds will come as further blow to first-time buyers throughout the UK, who are already having affordability issues to contend with.  According to Bank of Scotland calculations, If the stamp duty had gone up in line with the UK house price inflation, since their introduction, stamp duty thresholds would now be:-

 

Property Purchase Price                                 Rate of Stamp Duty Land Tax

 

Up to £191,000   (since 1993)                              0%

£191,001- £720,000   (since 1997)                       1%

£720,001- £1.4million  (since 1997)                     3%

Above £1.4million                                                4%

 

WithUKstamp duty predicted to increase above £10billion in 2007-2008, thresholds need to be lowered to help and encourage the first-time buyer back into the housing market, sooner than later.

 

 

Editor: Simon Weston-www.myfirsthomeltd.co.uk

 

Blog: www.myfirsthomeblog.com

 

Email: simon.weston@myfirsthomeltd.com


Bitcoin: 1BJbBAvdNHcZPZBnaFpyExUmAD9H1crosU


Litecoin:LXfkhyMe8gxdENyUc7Y5itHzFqr67F96nW

Or…

If you enjoyed this article FEEL Free to TIP My First Home Blog:


Any Amount Welcome 🙂


Dash: XmARRjJ9y2zUUgiPWPMrjviWWCvpuogwKd


Dogecoin: D5vAJ9ydfsNX1VE6e93Wh16gmUfVSUSKQq


Bitcoin: 1BJbBAvdNHcZPZBnaFpyExUmAD9H1crosU


Bitcoin Cash: 1Q8njMG4LPqFYthtNu6rq2Rbq9JqKXaPg1


Ethereum: 0x60454606e1f66C09e4fD7977b844718b683B2836

{ 0 comments… add one }

Connect with Facebook

Leave a Comment


x

Related Posts

How to buy a house with no money down
How to buy a house with no money down - Buying a house on installment terms or through mortgage always poses a problem of coming up with a down p...
Get The Most For Your Money When Buying Real Estate (Real Estate Buying)
Get The Most For Your Money When Buying Real Estate (Real Estate Buying)If you want information concerning purchasing real estate, you've come to...
Tips And Tricks For Real Estate Investment Success
Tips And Tricks For Real Estate Investment SuccessReal Estate Investment - Getting started investing in real estate as a career is something that...
powered by RelatedPosts