Stamp duty exemptions announced for first time buyers in the budget
Friday 2 November, 2018
Thomas Oliver’s Mortgage Broker, Richard Rushworth reviews this week’s budget and the stamp duty exemptions announced for shared ownership.
What is the Budget?
For those that don’t understand what the budget is, it is essentially the government’s yearly announcement about how it is going to spend the nation’s money. Remember all that money that you pay at the year-end or is labelled tax in your payslip. The budget outlines where this money goes and how it will be spent.
Policies announced in the budget
There was some good news in the budget as the personal allowance was increased so you will not be taxed on the first £12,500 you earn after April 2019. The beer, cider and spirit duties were frozen (no increase in tax), however the cost of a bottle of wine will increase by 8p in February.
Housing market announcements in the budget?
The main news concerning the housing market involved first time buyers benefiting from stamp duty relief on shared ownership homes up to £500,000. For normal homes this featured in last year’s budget but anyone participating in the shared ownership scheme still had to pay stamp duty. In the budget the Chancellor declared that this stamp duty relief would be made retrospective, so any first time buyer who has bought a property using shared ownership since his last budget would qualify for the relief.
The changes follows on from Hammond’s spring statement announcement that confirmed that stamp duty would be abolished up to a limited value. In July 2018 it was announced that 121,500 first time buyers had already benefited from that policy. Hammond stated in his budget: “we can’t resolve the productivity challenge or delivery the high standard of living the British people deserve without fixing our housing market.”
The shared ownership scheme is there to help first time buyers who can’t get on the housing ladder themselves. Over the last two to three years we have already seen an increase in the shared ownership proposals which is mainly down to the average homeowner not being able to afford a house outright. This is because in many areas wages have not increased in line with the property market over the last 3 years, so saving for a deposit has been difficult.
Richard Rushworth, Mortgage Broker and protection specialist in Brentwood & Hertford, Hertfordshire said: “We are meeting many first time buyers who find it difficult to get on the housing ladder and purchase their first home, so we are really pleased that Chancellor Hammond has announced that first time buyers who are buying a share of a property will not have to pay stamp duty. This stamp duty change should help the average first time buyer as it means they don’t have to worry so much about stamp duty and can concentrate on providing a bigger deposit and furnishing their new home. We are also pleased that this policy will apply retrospectively so anyone who has purchased a home through the shared-ownership scheme since the last budget can benefit from these changes. This policy should really help in the government’s push to get more first time buyers owning their own home. Overall this is nothing but good news and should also help the residential market. For anyone who bought a shared ownership after 22 November 2017 and paid stamp duty, remember you can reclaim a full refund by writing to the stamp duty land tax office, but this must be done within four years from the date you purchased your property.’
Richard Rushworth, Mortgage Broker in Tottenham, North London continued:
“I recommend if you are a first time buyer you contact your financial adviser for a financial planning review as they can explain how the stamp duty changes relate to your own financial circumstances. At Thomas Oliver our mortgage broking team offers mortgage advice to clients across Hertfordshire and North London. Please contact one of our mortgage advisers as soon as possible if you are looking to purchase your first home and you want to take advantage of these stamp duty exemptions.”
- Do you qualify for first time buyer stamp duty relief and exemptions?
- New Mortgage Products for family members assisting with a mortgage purchase
- First time buyers encouraged by lenders offering 5% deposit mortgages
Below is a full Budget Report from our sister company Kings Group: