Analysis by property website Zoopla reveals that stamp duty changes taking effect from April 1st will see a significant increase in the number of homebuyers liable for the tax, particularly in England and Northern Ireland. The changes will reduce the 'nil rate' band for first-time buyers and impact existing homeowners buying new properties.
More home buyers in England and Northern Ireland will be liable to pay stamp duty when changes to the tax take effect from April 1. The proportion of first-time buyers in England and Northern Ireland who will need to pay stamp duty will double from April, according to analysis by a property website. Meanwhile the proportion of existing homeowners buying a new home as their main residence who will be liable to pay stamp duty will increase from 49% to 83%, according to Zoopla ’s calculations.
From April, stamp duty discounts will become less generous, with the “nil rate” band for first-time buyers reducing from £425,000 to £300,000 and other home buyers seeing a reduction from £250,000 to £125,000. Stamp duty applies in England and Northern Ireland. Overall Zoopla estimates that the stamp duty changes could add an extra £1.1 billion annually in the tax to government coffers. The website’s analysis was based on buyer inquiries to estate agents and property prices and excludes the impact of those buying additional homes. Richard Donnell, executive director at Zoopla said: “Stamp duty has become a big source of tax revenue, approaching £10 billion a year for the Government. The reduction in tax reliefs from April will see more home buyers paying stamp duty.” He added: “It’s positive that most first-time buyers will still pay no stamp duty from April, but these changes hit those buying over £300,000 in southern England the most, where buying costs are already high. This will reduce buying power and market activity at a local level. “Stamp duty is a big tax on home movers in southern England, where affordability problems are already a major challenge. The case for reforming stamp duty remains, but the question is where to replace the multi-billion in annual tax revenues.” Simon Gerrard, chairman of Martyn Gerrard estate agents, said: “These upcoming stamp duty changes will disproportionately affect first-time buyers in London, where housing is much more expensive, with 97% of sales set to pay stamp duty from April. “In other areas, the impacts will be less pronounced. On the ground, we saw a big uptick in interest from first-time buyers in the last few months as they sought to get ahead of the changes, which will add thousands to the cost of buying a home. “Some of the negative impacts may be offset by the Bank of England lowering interest rates, which will make mortgages more affordable, but it could also see house prices increase even further. “The route onto the property ladder still contains so many barriers and the upcoming stamp duty threshold reductions will only aggravate an already dire situation.” He suggested that existing stamp duty relief should be kept in place for first-time buyers, “or better still abolish it for first-time buyers”. According to figures from Rightmove, the average asking price for a home has increased by 22% since November 2017, when the £300,000 first-time buyer relief threshold was introduced. The typical price tag has increased from £302,630 in November 2017 to £367,994. Rightmove said there are 28% more first-time buyers in London currently going through the sales completion process than at this time last year. Here are the percentages of transactions where existing homeowners buying a property as their main residence are liable to pay stamp duty now, followed by the estimates from April, according to Zoopla:And here are the percentages of first-time buyer transactions which are liable to pay stamp duty now, followed by the estimates from April, according to Zoopla
STAMP DUTY HOMEBUYERS ENGLAND NORTHERN IRELAND PROPERTY TAX ZOOPLA FIRST-TIME BUYERS HOUSING MARKET
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